June 30, 2009

According to a variety of sources, the United States government has forcibly overthrown, and attempted to overthrow, foreign governments perceived as hostile, and replaced them with new ones, actions that have become known as regime change. It has been noted that governments targeted by the U.S. have included democratically-elected governments, thus the target "regimes" are not necessarily authoritarian governments or juntas, but in some cases are replaced by such dictatorships. In other cases dictatorships have been replaced by democracies.

Regime change has been attempted through direct involvement of U.S. operatives, the funding and training of insurgency groups within these countries, anti-regime propaganda campaigns, coup d'états, and other, often illegal, activities usually conducted as operations by the Central Intelligence Agency (CIA). The U.S. has also accomplished regime change by direct U.S. military action. It has been argued that non-transparent United States government agencies who work in secret and sometimes mislead or do not fully implement the decisions of elected civilian leaders have been an important component of many such operations.

Shortly after the second world war, the Eisenhauer administration undertook a policy of overthrowing democratically elected governments in Latin America and elsewhere in accordance with the Monroe Doctrine which legitimized interference in other countries in the Western hemisphere and because of hysteria over communism.

Iran 1953

The 1953 Iranian coup d’état was the Western-led covert operation that deposed the democratically-elected government of Iranian Prime Minister Mohammed Mosaddeq. The coup was organized by the United States' CIA and the United Kingdom's MI6, who aided and abetted anti-Mosaddeq royalists and mutinous Iranian army officers in overthrowing the Prime Minister. CIA officer Kermit Roosevelt, Jr. organized Operation Ajax to aid retired General Fazlollah Zahedi. In the CIA history called TPAJAX, the TP preceding AJAX meant that it was a covert operation taking place in Iran.

After deposing Iran's popularly elected leader who was taken to jail, CIA operative Kermit Roosevelt carried out the plan devised by CIA agent Donald Wilber to install Imperial Guard Colonel Nematollah Nassiri to establish a pro-US and pro-UK government, by bribing Iranian government officials, reporters, and businessmen.

This Anglo–American coup d’état was to ensure Western control of Iran's petroleum resources and to prevent the Soviet Union from competing for Iranian oil. Moreover, the Iranian motivations for deposing Prime Minister Mosaddeq included reactionary clerical dissatisfaction with a secular government, fomented with CIA propaganda.

Thus the much hated Shah of Iran was installed in power by the US. His secret police SAVAK was known for its brutality

The Shah appreciated the coup, Kermit Roosevelt wrote in his account of the affair. "'I owe my throne to God, my people, my army and to you!' By 'you' he [the shah] meant me and the two countries—Great Britain and the United States—I was representing. We were all heroes."

Guatemala 1954

The 1954 Guatemalan coup d'état was a covert operation organized by the CIA to overthrow Jacobo Arbenz Guzmán, the democratically-elected President of Guatemala. Arbenz's government put forth a number of new policies, such as seizing and expropriating unused, unfarmed land that private corporations set aside long ago and giving the land to peasants. CIA Director Allen Dulles' concern that Guatemala would become a beachhead for communism in the Western hemisphere reverberated within the CIA and the Eisenhower administration, in the context of the anti-Communist fears of the McCarthyist era. Arbenz instigated sweeping land reform acts that antagonized the U.S.-based multinational company United Fruit Company, which had large stakes in the old order of Guatemala and lobbied various levels of the US government to take action against Arbenz. Both Dulles and his brother were shareholders of United Fruit Company.

The operation, which lasted from late 1953 to 1954, planned to arm and train an ad-hoc "Liberation Army" of about 400 fighters under the command of a then-exiled Guatemalan army officer, Colonel Carlos Castillo Armas, and to use them in conjunction with a complex and largely experimental diplomatic, economic, and propaganda campaign. The operation effectively ended the experimental period of representative democracy in Guatemala known as the "Ten Years of Spring", which ended with Arbenz's official resignation.

The operation was preceded by a plan, never fully implemented, as early as 1951, to supply anti-Arbenz forces with weapons, supplies, and funding, Operation PBFORTUNE. Afterwards there was an operation, Operation PBHISTORY, whose objective was to gather and analyze documents from the Arbenz government that would incriminate Arbenz as a Communist puppet.

Democratic Republic of the Congo 1960

Patrice Émery Lumumba, an African anti-colonial leader and the first legally elected Prime Minister of the Democratic Republic of the Congo, after he helped to win its independence from Belgium in June 1960, was deposed in a US CIA-sponsored coup during the Congo Crisis. He was subsequently imprisoned and assassinated under controversial circumstances.

Brazil 1964

The 1964 Brazilian coup d'état was a coup d'état (though self-denominated Revolution) against President João Goulart by the Brazilian military on the night of 31 March 1964. Democratically elected as vice-president to Jânio Quadros, João Goulart (a moderate nationalist also known as "Jango") acceded to the presidency upon Quadros' resignation under difficult circumstances.

At the time, the Brazilian military forced Jango into a compromise with the Congress, where his powers would be reduced through the approval of a constitutional amendment changing Brazil to a Parliamentary Democracy with Jango as a weakened head of state in order to halt his plan Plano Trienal.

In 1963, however, Jango successfully re-established the presidential system through a referendum. His reforms, contemporaneously interpreted as socialist in a world increasingly polarized by the Cold War, went against the interests of the military and right-wing sectors of society.

The coup d'etat is generally referred as a Revolution by its sympathizers. Brazil went into a military dictatorship lasting until the election of Tancredo Neves in 1985. The Brazilian military coup is framed as part of the Cold War and a response to the perceived threat of communism, but its actual motivations were mostly internal, ranging from the increasing inflation under Goulart to the shift in the capitalist accumulation pattern, with the rise of monopolist capitalism. It stands alongside the 1973 Chilean coup d'état and the 1976 Argentine coup as a military intervention in Latin American democracy during the Cold War.

Republic of Ghana 1966

On February 24, 1966, Prime Minister Kwame Nkrumah of the Ghana was overthrown by a claimed CIA-backed coup.

Nkrumah wanted Ghana to have modern armed forces, so he acquired aircraft and ships, and introduced conscription. He also gave military support to those fighting the Smith administration in Zimbabwe, then called Rhodesia. In February 1966, while Nkrumah was on a state visit to Vietnam, his government was overthrown in a military coup, which some claim was backed by the CIA. Today, Nkrumah is one of the most respected leaders in African history. In 2000, he was voted Africa's man of the millennium by listeners to the BBC World Service.

Iraq 1968

The leader of the new Baathist government, Salam Arif, died in 1966 and his brother, Abdul Rahman Arif, not a Ba'athist, assumed the presidency. Said K. Abuirsh alleges that in 1967 the government of Iraq was very close to giving concessions for the development of huge new oil fields in the country to France and the USSR. PBS reported that Robert Anderson, former secretary of the treasury under President Dwight D. Eisenhower, secretly met with the Ba'ath Party and came to a negotiated agreement according to which both the oil field concessions and sulphur mined in the northern part of the country would go to United States companies if the Ba'ath again took over power. In 1968, with a claimed backing of the CIA, Rahman Arif was overthrown by Ahmed Hassan al-Bakr of the Baath Party, bringing Saddam Hussein to the threshold of power. Roger Morris in the Asia Times writes that the CIA deputy for the Middle East Archibald Roosevelt (grandson of President Theodore Roosevelt and cousin of Kermit Roosevelt, Jr.) stated, referring to Iraqi Ba'ath Party officers on his payroll in the 1963 and 1968 coups, "They're our boys, bought and paid for, but you always gotta remember that these people can't be trusted." General Ahmed Bakr was installed as president. Saddam Hussein was appointed the number two man.

Chile 1973

Salvador Isabelino Allende Gossens served as the President of Chile from November 4, 1970 until the U.S. backed September 11, 1973 coup d'etat that ended his democratically elected Popular Unity government. He was a physician and the first democratically elected Marxist socialist to become president of a state in the Americas.

In office, Allende pursued a policy he called "La vía chilena al socialismo" ("The Chilean Way to Socialism"). This included nationalization of certain large-scale industries (notably copper), of the health care system, continuation of his predecessor Eduardo Frei Montalva's policies regarding the educational system, a program of free milk for children, and land redistribution. The previous government of Eduardo Frei had already partly nationalised copper by acquiring a 51 percent share in foreign owned mines. Allende expropriated the remaining percentage without compensating the U.S. companies that owned the mines.

Chilean presidents were allowed a maximum of 6 years, which may explain Allende's haste to restructure the economy. Not only did he have a significant restructuring program organised, it had to be a success if a successor to Allende was going to be elected.

At the beginning there was broad support in Congress to expand the government's already large part of the economy, as the Popular Unity and Christian Democrats together had a clear majority. But the government's efforts to pursue these policies led to strong opposition by landowners, some middle-class sectors, the rightist National Party, financiers, and the Roman Catholic Church (which in 1973 was displeased with the direction of the educational policy). Eventually the Christian Democrats united with the National Party in Congress.

The land-redistribution that Allende highlighted as one of the central policies of his government had already begun under his predecessor Eduardo Frei Montalva, who had expropriated between one-fifth and one-quarter of all properties liable to takeover. The Allende government's intention was to seize all holdings of more than eighty basic irrigated hectares. Allende also intended to improve the socio-economic welfare of Chile's poorest citizens; a key element was to provide employment, either in the new nationalised enterprises or on public works projects.

The Chilean coup d'état of 1973 is a landmark in the history of Chile and the Soviet-American Cold War. On 11 September 1973, the government of President Salvador Allende was overthrown by the military in a coup d’état.

The coup occurred two months after a first failed attempt, the Tanquetazo — Tank putsch — and a month after the Chamber of Deputies (with an Opposition majority) condemned President Allende’s alleged breaches of the Constitution. President Allende died during the coup; the cause of his death remains disputed.

General Augusto Pinochet assumed power after deposing President Salvador Allende, establishing a military government that ruled until 1990. This right-wing military deposition of an elected Socialist president by a U.S.-sponsored caudillo licenced the U.S.S.R. to retract from Russo-American détente in pursuit of foreign policy ambitions in the Third World.

Alan Greenspan personally instructed Pinochet in how to run his economy based on free market principles of privatization, deregulation and laissez faire capitalism. These policies enriched the upper class while making the lives of Chile's peasants more miserable.

Argentina 1976

The 1976 Argentine coup was a coup d'état that overthrew Isabel Perón on 24 March 1976, in Argentina. In her place, a military junta was installed, which was headed by General Jorge Rafael Videla, Admiral Emilio Eduardo Massera and Brigadier Orlando Ramón Agosti. The junta took the official name of "National Reorganization Process," and remained in power until 1983.

Although political repression (the so-called "Dirty War") began before the coup, as soon as Operativo Independencia, it was heavily extended after the coup and resulted in the "disappearances" of approximately 30,000 persons.

The United States Department of State learned of the preparations of the coup two months before.

Two days after the coup, U.S. Assistant Secretary of State for Latin America, William D. Rogers, stated "This junta is testing the basic proposition that Argentina is not governable...I think that's a distinctly odds-on choice." and "I think also we've got to expect a fair amount of repression, probably a good deal of blood, in Argentina before too long. I think they're going to have to come down very hard not only on the terrorists but on the dissidents of trade unions and their parties." US Secretary of State Henry Kissinger stated that "Whatever chance they have, they will need a little encouragement" and "because I do want to encourage them. I don't want to give the sense that they're harassed by the United States."

In June 1976, when human rights violations by the junta were criticized in the US, Kissinger reiterated support to the junta, directly addressing himself to Argentine Foreign Minister Admiral Cesar Augusto Guzzetti during a meeting in Santiago de Chile .

Nicaragua 1981-1990

CIA directed the Contra revolution, planted harbor mines and sunk civilian ships to overthrow the revolutionary Sandinista government of Nicaragua. After the Boland Amendment was enacted, it became illegal under U.S. law to fund the Contras; National Security Adviser Robert McFarlane, Deputy National Security Adviser Admiral John Poindexter, National Security Council staffer Col. Oliver North and others continued an illegal operation to fund the Contras, leading to the Iran-Contra scandal.

The U.S argued that:The United States initially provided substantial economic assistance to the Sandinista-dominated regime. We were largely instrumental in the OAS action delegitimizing the Somoza regime and laying the groundwork for installation for the new junta. Later, when the Sandinista role in the Salvadoran conflict became clear, we sought through a combination of private diplomatic contacts and suspension of assistance to convince Nicaragua to halt its subversion. Later still, economic measures and further diplomatic efforts were employed to try to effect changes in Sandinista behavior.

Nicaragua's neighbors have asked for assistance against Nicaraguan aggression, and the United States has responded. Those countries have repeatedly and publicly made clear that they consider themselves to be the victims of aggression from Nicaragua, and that they desire United States assistance in meeting both subversive attacks and the conventional threat posed by the relatively immense Nicaraguan Armed Forces.

Guatemala 1993

In 1993 the CIA helped in overthrowing Jorge Serrano Elías. Jorge then attempted a self-coup, suspended the constitution, dissolved Congress and the Supreme Court, and imposed censorship. He was replaced by Ramiro de León Carpio.

Venezuela 2002

In 2002, Washington is claimed to have approved and supported a coup against the democratically-elected Venezuelan government, acting through senior officials of the U.S. government, including Special Envoy to Latin America Otto Reich and convicted Iran-contra figure and George W. Bush "democracy 'czar'" Elliott Abrams, who have long histories in the U.S. backed "Dirty Wars" of the 1980s in Central America, and links to U.S.-supported death squads working in Central America at that time. Top coup plotters, including Pedro Carmona, the man installed during the coup as the new president, began visits to the White House months before the coup and continued until weeks before the putsch. The plotters were received at the White House by the man President George W. Bush tasked to be his key policy-maker for Latin America, Special Envoy Otto Reich. It has been claimed that Reich was the U.S. mastermind of the coup.

Venezuela claims that a confidential memorandum from the US embassy to the CIA revealed and circulated by the Venezuelan government on November 26, 2007 provides details on the activity of a CIA unit engaged in clandestine action to destabilize the forth-coming national referendum and to coordinate the civil and military overthrow of the democratically-elected government of Venezuela. According to the Venezuelan government, the memo, entitled "Advancing to the Last Phase of Operation Pincer," was sent by Michael Middleton Steere addressed to the Director of CIA, Michael Hayden, and outlines covert Operation Pincer (OP) (Operación Tenaza).

According to these claims, Operation Pincer entails a two-pronged strategy of impeding the upcoming national referendum of December 2, 2007 on important changes to the Venezuelan constitution urged by the government of President Hugo Chavez, rejecting the outcome, and at the same time calling for a 'no' vote. In the run up to the referendum, OP includes running phony polls, attacking electoral officials and running propaganda through the private media accusing the government of fraud and calling for a 'no' vote. Contradictions, the report emphasizes, are of no matter.

Interestingly enough, now that the US no longer has the excuse of the Cold War for its policy of intervening in foreign governments to promote its self-interests, the same tendencies toward land redistribution and nationalization of natural resources such as oil still exist in many other countries. The impetus towards socialization of resources counters the US promotion through the IMF and World Bank towards privatization. Hugo Chavez, President of Venezuela, is a case in point.

As the leader of the Bolivarian Revolution, Chávez promotes a political doctrine of participatory democracy, socialism and Latin American and Caribbean cooperation. He is also a critic of neoliberalism, globalization, and United States foreign policy.

A career military officer, Chávez founded the left-wing Fifth Republic Movement after orchestrating a failed 1992 coup d'état against former President Carlos Andrés Pérez. Chávez was elected President in 1998 with a campaign centering on promises of aiding Venezuela's poor majority, and was reelected in 2000 and in 2006. Domestically, Chávez has maintained nationwide Bolivarian Missions, whose goals are to combat disease, illiteracy, malnutrition, poverty, and other social ills. Abroad, Chávez has acted against the Washington Consensus by supporting alternative models of economic development, and has advocated cooperation among the world's poor nations, especially those in Latin America.

Chávez's policies have evoked controversy in Venezuela and abroad, receiving anything from vehement criticism to enthusiastic support. The government of the United States claims that Chávez is a threat to democracy in Latin America. Many other governments sympathize with his ideology or welcome his bilateral trade and reciprocal aid agreements. In 2005 and 2006 he was named one of Time magazine's 100 most influential people.

And to bring this up to the present:

Honduras 2009

The crisis in Honduras, where members of the country’s military abruptly awakened President Manuel Zelaya on Sunday and forced him out of the country in his bedclothes, is pitting Mr. Obama against the ghosts of past American foreign policy in Latin America.

The United States has a history of backing rival political factions and instigating coups in the region, and administration officials have found themselves on the defensive in recent days, dismissing repeated allegations by President Hugo Chávez of Venezuela that the C.I.A. may have had a hand in the president’s removal.

While the US has issued heavily-qualified statements critical of the coup—in the aftermath of the events in Honduras—the US could have flexed its tremendous economic muscle before the coup and told the military coup plotters to stand down. The US ties to the Honduran military and political establishment run far too deep for all of this to have gone down without at least tacit support or the turning of a blind eye by some US political or military official(s).

Here are some facts to consider: the US is the top trading partner for Honduras. The coup plotters/supporters in the Honduran Congress are supporters of the “free trade agreements” Washington has imposed on the region. The coup leaders view their actions, in part, as a rejection of Hugo Chavez’s influence in Honduras and with Zelaya and an embrace of the United States and Washington’s “vision” for the region. Obama and the US military could likely have halted this coup with a simple series of phone calls.

Conclusion

The promotion of policies which mitigate against unfettered capitalism and represent the interests of the poor is gaining ascendency among a number of countries and has been accelerated by the collapse of the US model which caused the economic meltdown of 2008-2009. The BRIC (Brazil, Russia, India, China) countries are coming together to represent the interests of the world's developing nations. Their alternative to the US model seems to be gathering steam as the US apparently is in decline. And the impulse to use a nation's resources to benefit the people of that nation rather than an economic elite resurfaces and resurges, this time with hardly a whimper of protest from the US which is so overextended and underfunded that it can only watch as as it is overtaken by much fitter nations, nations that have the resources the US lusts after and which intend to keep the profits at home and use them to benefit all its citizens and not just a wealthy elite. The fight between privatization and socialization of resources and services continues both nationally and internationally.

June 28, 2009

By now almost everyone has heard about South Carolina Governor Mark Sanford, a virulent critic of Clinton's sexual escapade with Monica Lewinski and strident Christian values proponent, who has confessed to an affair with a woman from Argentina. Last week he left his state without telling anyone and spent several days in Buenos Aires with his mistress while hinting he was hiking on the Appalachian Trail. And yet he hasn't resigned as Governor. He's just one of a long string of Republican hypocrites who espouse Christian values and then cheat on their wives or have gay sex with underage boys including Mark Foley, Henry Hyde, Bob Livingston, Newt Gingrich, John Ensign, David Vitter, Mr. "Wide Stance" Larry Craig. They're all adulterers or pedophiles.

S.C. Gov. Mark Sanford’s staff said this morning that the governor, who went mysteriously incommunicado for several days, plans to return to his office Wednesday.

Late Monday, his office said the governor was hiking on the Appalachian Trail, ending four days during which staff and state officials said they had not heard from him.

State Sen. Jake Knotts issued statement today saying: “I’m happy to hear that Governor Sanford has finally contacted his office after being missing from the state for five days."

"While I believe every person deserves a vacation, our constitution gives only one man authority to act in case of an emergency - the governor of South Carolina. Should the governor decide to vacation away from South Carolina again, it is my sincere hope that he will take his security detail and keep his cell phone on so that he can be reached in case of a large-scale emergency," the statement said.

"If he is not willing to do so, he should turn his gubernatorial authority over to the lieutenant governor,” it continued.

Knotts, a Lexington Republican and frequent Sanford critic, is an ally of Lt. Gov. Andre Bauer.

Knotts make Sanford's absence public Monday by issuing a news release saying that SLED did not know where the governor was and asking who was in charge of S.C. government.

In a statement, Joel Sawyer, Sanford's spokesman said, "Governor Sanford called to check in with his chief of staff this morning. It would be fair to say the governor was somewhat taken aback by all of the interest this trip has gotten.

"Given the circumstances and the attention this has garnered, the governor communicated to us that he plans on returning to the office tomorrow.

Neither Sanford’s office nor the State Law Enforcement Division, which provides security for governors, had been able to reach Sanford since he left the mansion Thursday in a black Suburban SUV assigned to his security detail, said state Sen. Jake Knotts , R-Lexington, and three others familiar with the situation, but who declined to be identified.

On Monday, Sawyer would not disclose where on the trail the governor was hiking, nor would he reveal whether Sanford was hiking alone.

Sanford’s last known location was near Atlanta late last week. A mobile telephone tower there picked up a signal from his phone, according to a source familiar with the situation.

Since then, the governor’s state and personal phones had been turned off, and Sanford had not responded to phone or text messages, a source said. Most mobile phones cannot be tracked if they are turned off.

First lady Jenny Sanford said Monday her husband has been gone for several days over Father’s Day weekend and she did not know where.

She said she was not concerned.

“He was writing something and wanted some space to get away from the kids,” Jenny Sanford told The Associated Press while vacationing with the couple’s four sons at their Sullivan’s Island beach house.

The two-term governor is chairman of the Republican Governors Association. This spring, Sanford became known nationally as the most outspoken governor who opposed federal stimulus money. That position won Sanford national attention until he lost a court battle.

Sawyer said Monday the governor told staffers late last week where he was going to be.

“Before leaving last week, he let staff know his whereabouts and that he’d be difficult to reach,” Sawyer said in a interview with The State.

In an earlier statement Monday, Sanford’s office said: “Gov. Sanford is taking some time away from the office this week to recharge after the stimulus battle and the legislative session, and to work on a couple of projects that have fallen by the wayside.

“We are not going to discuss the specifics of his travel arrangements or his security arrangements,” the statement said.

One official familiar with the situation said there was no indication Sanford had been harmed. He regularly makes trips without his security detail.

Sanford usually uses the Suburban, which is assigned to agents who transport him, the source said.

Knotts, a longtime Sanford critic, said he contacted SLED Chief Reggie Lloyd Saturday after he heard reports the governor could not be reached.

“I was recently made aware that Governor Sanford has frequently been eluding SLED agents and disappearing at odd times,” Knotts said.

Lloyd could not be reached for comment late Monday.

On previous unescorted trips, Sanford has not been out of all contact - including with his own office - for this long, a source said.

The state’s chief executive should never be unreachable, Knotts said.

“As the head of our state, in the unfortunate event of a state of emergency or homeland security situation, Governor Sanford should be available at all times to the chief of SLED,” the senator said.

“I want to know immediately who is running the executive branch in the governor’s absence,” Knotts said.

So Sanford's attempt to fool everybody went horribly wrong - for Sanford. But Sanford, who has refused to step down, is guilty of an even worse crime than cheating on his wife. After all, if it weren't for his utter hypocrisy in putting himself up there as a paragon of Christian values and castigating the hell out of Clinton, I would say it's a matter between him and his wife. The worse crime in my opinion was refusing to accept stimulus money for the state of South Carolina thereby denying the poor of his state extended unemployment and other welfare benefits at a time of huge job loss and economic recession.

Sanford has failed on at least three accounts: (1) cheating on his wife which is the moralistic Christian failing although welshing on a committment and a vow transcends Christianity; (2) lying to the people of South Carolina on his whereabouts and leaving the state with no one in control; and (3) the far greater sin in Christian terms of refusing to help the poor by refusing to accept stimulus money.

According to Matthew 25:

"When the Son of Man comes in his glory, and all the angels with him, he will sit on his throne in heavenly glory. All the nations will be gathered before him, and he will separate the people one from another as a shepherd separates the sheep from the goats. He will put the sheep on his right and the goats on his left.

"Then the King will say to those on his right, 'Come, you who are blessed by my Father; take your inheritance, the kingdom prepared for you since the creation of the world. For I was hungry and you gave me something to eat, I was thirsty and you gave me something to drink, I was a stranger and you invited me in, I needed clothes and you clothed me, I was sick and you looked after me, I was in prison and you came to visit me.'

"Then the righteous will answer him, 'Lord, when did we see you hungry and feed you, or thirsty and give you something to drink? When did we see you a stranger and invite you in, or needing clothes and clothe you? When did we see you sick or in prison and go to visit you?'

"The King will reply, 'I tell you the truth, whatever you did for one of the least of these brothers of mine, you did for me.' "

The Jesus goes on to say that those who did not help the "least of these" will not be joining him in Heaven but instead will go to that other place - where there is no air conditioning.

This is the epitome of Jesus' Christian philosophy, a philosophy which is too often ignored by a narrow moralistic interpretation of the Bible, too often ignored by the pompous, pretentious likes of Gov. Mark Sanford and other Republican hypocrites.

Sanford had no mercy for Clinton. Why should anyone have any mercy for him?

The standard Sanford has set for other politicians over the years has been fairly high. A member of the House of Representatives during the heyday of the Clinton-Lewinsky affair, he was often a harsh critic of the president for his marital misconduct.

This is "very damaging stuff," Sanford declared at one point, when details of Clinton's conduct became known. "I think it would be much better for the country and for him personally (to resign)... I come from the business side," he said. "If you had a chairman or president in the business world facing these allegations, he'd be gone."

Explaining his decision to back impeachment articles against Clinton, he added, "I think what he did in this matter was reprehensible... I feel very comfortable with my vote."

Sanford's complaints were directed primarily, although not entirely, at Clinton's lying about the affair rather than the affair itself. At one point, however, he proclaimed that Clinton was likely to get away with his infidelities and indiscretion because he already had the perception of someone who was untrustworthy.

"In politics you can get away with anything as long as it's what's expected," he was quoted saying in a Boston Globe article published in December 1998. "If people expect you to be a rascal, you can be a rascal."

He needs to be held to his own high standards and made to resign in shame. If he were a Democrat, the Republicans would be piling on. Yet here he is, refusing to resign as governor after having made a mockery out of his marriage and the governorship of South Carolina and that's not even the worst of it. From a true Christian persepective his refusal to help "the least of these" in a time of hardship would put him in the class of the goats when Jesus talked about separating the sheep from the goats.

Mark Sanford is a sanctimonious asshole who cheated on his wife, denied the poor of South Carolina a few crumbs from the table while living in the lap of luxury himself and refuses to resign which would be the honorable thing to do.

And as far as the emails go with all the intimate details and misspellings, all I can say is how far the mighty have fallen. Never in a million years did Mark Sanford think that these would be released to the public. They probably threw a wet blanket on the whole love affair! Now we know what trivial tripe goes through the governor's mind! I feel sorry for Maria though. She's obviously sincere while the governor is at best ... immature?

Maria says: "Thanks for your beautiful words, I don’t know if I do need or not therapy but I have to find my new place in this new stage of my life. Life has been very generous with me and I want to return at least a little bit of what I have been given. I have time and think helping others who haven’t been as lucky as me will do me fine." So Maria wants to help the "least of these" in so many words. Good luck with a Republican governor who only wants to help the wealthy, who denied the "least of these" in his own state the help they would have gotten from the stimulus package. I can see this match is a mismatch from the start. No, Maria, if you want to make it with the governor, you will have to become as cold and heartless as he is and learn to appreciate the good life as only a self-serving Republican hypocrite can.

And I'm sure that Maria is familiar with this bit of history of CIA support for the junta that overthrfew the Peron regime in Argentina in 1976 even if Mark Sanford is not:

The 1976 Argentine coup was a coup d'état that overthrew Isabel Perón on 24 March 1976, in Argentina. In her place, a military junta was installed, which was headed by General Jorge Rafael Videla, Admiral Emilio Eduardo Massera and Brigadier Orlando Ramón Agosti. The junta took the official name of "National Reorganization Process," and remained in power until 1983.

Although political repression (the so-called "Dirty War") began before the coup, as soon as Operativo Independencia, it was heavily extended after the coup and resulted in the "disappearances" of approximately 30,000 persons.

The United States Department of State learned of the preparations of the coup two months before.

Two days after the coup, U.S. Assistant Secretary of State for Latin America, William D. Rogers, stated "This junta is testing the basic proposition that Argentina is not governable...I think that's a distinctly odds-on choice." and "I think also we've got to expect a fair amount of repression, probably a good deal of blood, in Argentina before too long. I think they're going to have to come down very hard not only on the terrorists but on the dissidents of trade unions and their parties." US Secretary of State Henry Kissinger stated that "Whatever chance they have, they will need a little encouragement" and "because I do want to encourage them. I don't want to give the sense that they're harassed by the United States."

In June 1976, when human rights violations by the junta were criticized in the US, Kissinger reiterated support to the junta, directly addressing himself to Argentine Foreign Minister Admiral Cesar Augusto Guzzetti during a meeting in Santiago de Chile .

DON'T CRY FOR ME, ARGENTINA!

And then this epistle from the guv:

"Have you been told lately how warm your eyes are and how they softly glow with the special nature of your soul. I remember Jenny, or someone close to me, once commenting that while my mom was pleasant and warm it was sad she had never accomplished anything of significance. I replied that they were wrong because she had the ultimate of all gifts — and that was the ability to love unconditionally. The rarest of all commodities in this world is love. It is that thing that we all yearn for at some level — to be simply loved unconditionally for nothing more than who we are — not what we can get, give or become. There are but 50 governors in my country and outside of the top spot, this is as high as you can go in the area I have invested the last 15 years of my life — my getting here came as no small measure because I had that foundation of love and support so critical to getting up in the morning and feeling you could give and risk because you already had a full tank of love in the emotional bank account. Since our first meeting there in a wind swept somewhat open air dance spot in Punta del Este, I felt that you had that same rare attribute. Above all else I love that inner beauty about you. That gift of yours is going to make a tremendous difference in (The State deleted sons’ names) life — and in anyone’s life who is blest to be touched by yours — you need to rest very comfortably in that fact. As I mentioned in our last visit, while I did not need love fifteen years ago — as the battle scars of life and aging and politics have worn on this has become a real need of mine. You have a particular grace and calm that I adore. You have a level of sophistication that is so fitting with your beauty. I could digress and say that you have the ability to give magnificently gentle kisses, or that I love your tan lines or that I love the curves of your hips, the erotic beauty of you holding yourself (or two magnificent parts of yourself) in the faded glow of night’s light — but hey, that would be going into the sexual details we spoke of at the steakhouse at dinner — and unlike you I would never do that!"

Golleee!! He mentions his wife that he's cheating on in the next sentence after he praises his lover. How insensitive! The guv wants to be loved unconditionally while showing no sympathy or compassion for the people of his own state who might benefit from the stimulus money. How audacious! Like a typical self-centered asshole, he wants it for himself but refuses to give it not even a little bit. And then he goes on to praise himself as having attained a level "as high as you can go" in politics. You're so wonderful Mr. Sanford, it makes me gag. And how your mother's unconditional love enabled you to gain the "top spot." Why don't you show a little unconditional love yourself for somebody other than yourself? You had a "full tank of love in your emotional bank account" while you expect other people that you could help out to drive on empty. Oh, you didn't need love 15 years ago, but your mother gave you all that unconditional love that helped you become successful? Non sequitur, sir! And are you saying that your wife, Jenny, never gave you any love? That seems to be what you're implying. What is she - just a potted plant? And love has become a real need, as you say, well this is something you're not getting from your wife. So what are you doing - living a lie? But you Republicans routinely live lies. That's your stock-in-trade along with hypocrisy. I guess when someone real comes along, you're very smitten since you've been associating with phonies all these years. But does this mean that you're going to have a change of heart and adopt Maria's ethic of helping those less fortunate than yourself? Does it mean, God forbid, that you might have a heart transplant and become a bleeding heart liberal? Or is all this pandering to Maria just to continue basking in the "warm glow of her eyes"?

And your reticence, Mr. Guv, to go into the "sexual details we spoke of at the steakhouse at dinner." Is that because, after all, you're a sanctimonious tight assed Christian who needs to preserve some modicum of decorum vis a vis this raunchy South American sex goddess? Well, you did loosen up enough to speak of "your tan lines or that I love the curves of your hips, the erotic beauty of you holding yourself (or two magnificent parts of yourself) in the faded glow of night’s light." Not exactly purple prose - especially the part about holding "two magnificent parts of yourself." What is she - a piece of meat? Shoulder, butt, arm roast, ham hocks, rump roast? You were doing pretty good until you got to the "erotic beauty" part. "Tan lines, curve of your hips" - that's good stuff! But speaking of her "body parts"? For shame. You must think she's as smugly self-centered as you are with as big a self-serving ego as you have to think she wants to hear about her particular "grace and calm" and "level of sophistication so fitting of your beauty." Why it is beginning to sound like she's everything the wife you're cheating on is not. A perfect trophy wife, someone who can give you unconditional love, and, by the sound of it, pretty darn good sex too!

Well enough of this diatribe dragging the governor's sorry ass through the sorry hell he's created for himself. Now he'll have to repair his sorry relationship with his sorry wife who can't give him unconditional love or passionate sex. But guv, grow up. After 15 or 20 years of marriage, sex isn't passionate any more. But with a young Argentinian, well, guv, I guess you didn't know what you were missing until it "sparked." But you know, guvernur, what it comes down to is this: You threw your career, wife and family (not to mention the poor people of South Carolina) under the bus for a piece of ass.

June 26, 2009

Robert Reich has a blog post entitled: "What Can I Do?" Many people are frustrated because they don't see that Washington is moving fast enough to solve their problems. Should they email their Congressman or should they march in the streets? And if they march in the streets, where are all the other marchers going to come from? The following is the comment I left on Robert Reich's blog:

In the sixties there was a real social movement. It managed to stop the Vietnam war but not soon enough. It should have ended years earlier. Other than that the movement went nowhere and eventually petered out in food coops that later turned into chiropractor's offices that later became real estate offices. Although there was much talk of changing the system and much adulation of Che Guevarra and other revolutionaries, nothing much came of any of it. The only real hurting issue was the draft, and, once that was over, there was too much prosperity around for anyone to want to continue to change the system. The system seemed to be working quite well.

Now the system is not working at all well. We have $10 trillion more in national debt than we had in the sixties. We are losing jobs at an incredible pace. We are fighting two unnecessary wars. The states are broke. College graduates are tens of thousands of dollars in debt with paltry job prospects thus insuring defaults on their student loans and ever increasing debt, a good start on a life of indebtedness. Credit card companies use "trick and trap" as their profit model instead of long term ability to pay. Lobbyists run our economy. The health care system is in shambles, but nobody wants "socialized medicine," even though it's proven to be the best system in the rest of the world. Homelessness is increasing as people are defaulting on mortgages right and left.

Yet there is no rioting in the streets. Why? Because culturally people are still buying into right wing claptrap about freedom and democracy and low taxation. So as the misery index increases, a right wing movement seems more likely than a left wing one. Tea parties seem more fashionable than black gloved fists. Fascism seems a more likely prospect for the US than a socialist utopia. People are more worried about their guns being takien away and denying gays the right to marry than they are about universal health care or universal human rights or about providing jobs for everyone or about guaranteeing everyone a minimally decent basic standard of living. People are more apt to blame the individual for his or her failings than to blame the system.

So the plight of the US is that the right wing fantasies are being sold more effectively than the left wing ones. The fantasy of individualism and "don't tread on me" is gaining more traction than the fantsasy of "we're all in this together". As the US goes down the tubes, even a prolonged recession/depression will likely not get people in the streets demanding a more just and equitable society. Instead people will cling to the American dream that they too will get rich and live in opulent luxury some day. They too will have a private jet and a private yacht and date movie stars, maybe even have a trophy wife. They too will be famous and have a 30,000 square foot home.

The problem is that Americans by and large have the wrong values. But events, I think, rather than marching, in the streets will overtake the situation. As other countries move forward along more progressive and successful lines, US debt problems will overtake us turning the first world into a third rate nation with a huge nuclear arsenal. The US military national security state empire comprising the largest military budget in the world, larger than all other nations combined, and over 700 military bases in virtually every country in the world will collapse. American hubris will then either go into overdrive producing fascism or it will collapse producing a "we're all in this together" spirit. It's not entirely clear what will happen then. But for right now we're still spinning our wheels even with Mr. "Change you can believe in" at the helm.

June 23, 2009

America’s political scene has changed immensely since the last time a Democratic president tried to reform health care. So has the health care picture: with costs soaring and insurance dwindling, nobody can now say with a straight face that the U.S. health care system is O.K. And if surveys like the New York Times/CBS News poll released last weekend are any indication, voters are ready for major change.

The question now is whether we will nonetheless fail to get that change, because a handful of Democratic senators are still determined to party like it’s 1993.

And yes, I mean Democratic senators. The Republicans, with a few possible exceptions, have decided to do all they can to make the Obama administration a failure. Their role in the health care debate is purely that of spoilers who keep shouting the old slogans — Government-run health care! Socialism! Europe! — hoping that someone still cares.

The polls suggest that hardly anyone does. Voters, it seems, strongly favor a universal guarantee of coverage, and they mostly accept the idea that higher taxes may be needed to achieve that guarantee. What’s more, they overwhelmingly favor precisely the feature of Democratic plans that Republicans denounce most fiercely as “socialized medicine” — the creation of a public health insurance option that competes with private insurers.

Or to put it another way, in effect voters support the health care plan jointly released by three House committees last week, which relies on a combination of subsidies and regulation to achieve universal coverage, and introduces a public plan to compete with insurers and hold down costs.

Yet it remains all too possible that health care reform will fail, as it has so many times before.

I’m not that worried about the issue of costs. Yes, the Congressional Budget Office’s preliminary cost estimates for Senate plans were higher than expected, and caused considerable consternation last week. But the fundamental fact is that we can afford universal health insurance — even those high estimates were less than the $1.8 trillion cost of the Bush tax cuts. Furthermore, Democratic leaders know that they have to pass a health care bill for the sake of their own survival. One way or another, the numbers will be brought in line.

The real risk is that health care reform will be undermined by “centrist” Democratic senators who either prevent the passage of a bill or insist on watering down key elements of reform. I use scare quotes around “centrist,” by the way, because if the center means the position held by most Americans, the self-proclaimed centrists are in fact way out in right field.

What the balking Democrats seem most determined to do is to kill the public option, either by eliminating it or by carrying out a bait-and-switch, replacing a true public option with something meaningless. For the record, neither regional health cooperatives nor state-level public plans, both of which have been proposed as alternatives, would have the financial stability and bargaining power needed to bring down health care costs.

Whatever may be motivating these Democrats, they don’t seem able to explain their reasons in public.

Thus Senator Ben Nelson of Nebraska initially declared that the public option — which, remember, has overwhelming popular support — was a “deal-breaker.” Why? Because he didn’t think private insurers could compete: “At the end of the day, the public plan wins the day.” Um, isn’t the purpose of health care reform to protect American citizens, not insurance companies?

Mr. Nelson softened his stand after reform advocates began a public campaign targeting him for his position on the public option.

And Senator Kent Conrad of North Dakota offers a perfectly circular argument: we can’t have the public option, because if we do, health care reform won’t get the votes of senators like him. “In a 60-vote environment,” he says (implicitly rejecting the idea, embraced by President Obama, of bypassing the filibuster if necessary), “you’ve got to attract some Republicans as well as holding virtually all the Democrats together, and that, I don’t believe, is possible with a pure public option.”

Honestly, I don’t know what these Democrats are trying to achieve. Yes, some of the balking senators receive large campaign contributions from the medical-industrial complex — but who in politics doesn’t? If I had to guess, I’d say that what’s really going on is that relatively conservative Democrats still cling to the old dream of becoming kingmakers, of recreating the bipartisan center that used to run America.

But this fantasy can’t be allowed to stand in the way of giving America the health care reform it needs. This time, the alleged center must not hold.

Paul Krugman is professor of Economics and International Affairs at Princeton University and a regular columnist for The New York Times. Krugman was the 2008 recipient of the Nobel Prize in Economics. He is the author of numerous books, including The Conscience of A Liberal, and his most recent, The Return of Depression Economics.

An investigation by the House Subcommittee on Oversight and Investigations showed that health insurers WellPoint Inc., UnitedHealth Group and Assurant Inc. canceled the coverage of more than 20,000 people, allowing the companies to avoid paying more than $300 million in medical claims over a five-year period.

It also found that policyholders with breast cancer, lymphoma and more than 1,000 other conditions were targeted for rescission and that employees were praised in performance reviews for terminating the policies of customers with expensive illnesses.

It is totally immoral and unethical to cancel a person's medical insurance at the moment of their greatest need and this fact alone should be reason enough to adopt a public national health care plan. At least rescission should be outlawed. The health insurance industry makes its profits by denying people coverage.

When are the American people going to wise up and recognize that the health care insurance industry is at root unethical and demand public health care that isn't canceled after they get sick? No wonder the single greatest cause of bankruptcy is medical expense. It shouldn't be this way. Big Insurance is counting on the fact that only a small minority of its policyholders is affected by policy cancellation and bankruptcy and the rest of relatively healthy policyholders don't give a hoot about the ones who are.

You know, these policies by the health insurance industry are very similar to Enron's energy policies which resulted in "screwing Grandmas in California," as one of the Enron traders said. Unfettered capitalism leads to greed running amok and ruining people's lives while the CEOs and other executives take home obscene amounts of money. Bill McGuire of United Health Care left with over a billion dollars! That money was made by denying sick people their health insurance claims. It is tantamount to a death sentence for many patients and it is ruining the lives of countless others as they file for bankruptcy. Obama's mother herself was a victim of the health insurance industry since, as recounted by Obama, she had to argue with the insurance company over her coverage as she was dying of cancer.

Doctors, nurse and hospitals used to be there to heal and to help sick patients. They were "helpers" dedicated to improving peoples' lives and restoring their health so they could go on to live productive lives. They were "good" people. My father, Clifton Lawrence, served for 20 years as President of the Board of the Alexander Linn hospital in Sussex, NJ. He wasn't paid for his efforts. It was community service. Today it's all about profit and obscene profit at that; it's about lucre. Nothing that's not lucrative is worth doing according to the prevailing economic philosophy. Community service is out the window - defenestrated. Who needs to be defenestrated are the CEOs of the insurance companies whose stock-in-trade is denying people the help they need in order to make obscene profits for their corporations.

More from the LA Times article:

But rescission victims testified that their policies were canceled for inadvertent omissions or honest mistakes about medical history on their applications. Rescission, they said, was about improving corporate profits rather than rooting out fraud.

"It's about the money," said Jennifer Wittney Horton, a Los Angeles woman whose policy was rescinded after failure to report a weight-loss medication she was no longer taking and irregular menstruation.

"Insurers ignore the law, and when they find a discrepancy or omission, they rescind the policy and refuse to pay any of your medical bills -- even for routine treatment or treatment they previously authorized," Horton said.

She and others from around the country accused insurers in testimony of gaming anti-fraud laws to take policyholders' premiums, only to drop people who developed serious illnesses. They testified that they or a deceased loved one had had policies canceled over innocent mistakes and inadvertent omissions on their applications.

A Texas nurse said she lost her coverage, after she was diagnosed with aggressive breast cancer, for failing to disclose a visit to a dermatologist for acne.

The sister of an Illinois man who died of lymphoma said his policy was rescinded for the failure to report a possible aneurysm and gallstones that his physician noted in his chart but did not discuss with him.

The committee's investigation found that WellPoint's Blue Cross targeted individuals with more than 1,400 conditions, including breast cancer, lymphoma, pregnancy and high blood pressure. And the committee obtained documents that showed Blue Cross supervisors praised employees in performance reviews for rescinding policies.

One employee, for instance, received a perfect 5 for "exceptional performance" on an evaluation that noted the employee's role in dropping thousands of policyholders and avoiding nearly $10 million worth of medical care.

Committee members took turns, alternating Democrats and Republicans, condemning such practices.

"When times are good, the insurance company is happy to sign you up and take your money in the form of premiums," said Rep. Bart Stupak (D-Mich.). "But when times are bad . . . some insurance companies use a technicality to justify breaking its promise, at a time when most patients are too weak to fight back."

Robert Reich has a memo to Obama posted on his blog about what the President must do to save public universal health care.

June 21, 2009

Water for Sale: What is called for is an international code for the public’s access to a guaranteed supply of water as a basic human right.

by Lisa Boscov-Ellen

The Corporate Crusade to Commodify Water

Water has been characterized as the oil of the 21st century. Blue gold. It is essential to life, and yet humanity faces a growing water crisis as a result of severe mismanagement in water and sanitation, which will be exponentially exacerbated in the coming decades by population growth combined with declining resources. Latin America has the greatest income disparity in the world and the population’s access to water reflects this inequality. Over 130 million people living in the region do not have access to potable water in their homes, and sanitation is in even poorer condition, as it is estimated that only one in six persons has adequate sanitation services. According to the 2007 Annual Report from the nonprofit organization Water For People, “Every day, nearly 6,000 people who share our world die from water-related illnesses – more than 2 million each year – and the vast majority of these are children…There are more lives lost each year to water-related illnesses than to natural disasters and wars combined.” It is clear that lack of access to clean water is a serious issue, one that has only started to gain international attention from a variety of organizations in recent years.

The Fifth World Water Forum took place in Istanbul, Turkey, from March 16-22, 2009, with over 25,000 people attending, representing 182 countries. The World Water Forum, the largest water policy event in the world, is held every three years. It is organized by the World Water Council, a private think-tank based in Marseille, France. The People’s Water Forum, a global water justice movement which has referred to the World Water Forum as “false” and “corporate driven,” also gathered in Istanbul to protest the Fifth World Water Forum. In the People’s Water Forum Declaration, they sharply criticize the World Water Forum, stating that it is motivated by private interests and attempts to create the misleading illusion of an utterly false global consensus on water management. The Declaration also asks that the next water forum be organized by the UN General Assembly, calls for water to be defined as a human right, and denounces all forms of privatization and commercialization of water and sanitation services. Joining the discussion, the International Water Forum, a by-invitation-only Forum sponsored by the United Nations Institute for Training and Research (UNITAR), the City of Atlanta Department of Watershed Management, and CIFAL Atlanta will be held on July 9-10 of this year to discuss global water scarcity as well as methods for establishing a sustainable water supply.

The struggle over water is certainly not a new phenomenon. Wide-scale water privatization began in the 1990s and was often stipulated as a condition for assistance from international financial aid institutions, primarily the World Bank and the Inter-American Development Bank. Since then, there has been ongoing conflict over water management, with Latin America at the center of many of the models for resistance and restructuring. These water-related conflicts, popularly referred to as “water wars,” gained international attention a decade ago. The expulsion of water giant Bechtel by the citizens of the Bolivian city Cochabamba marked the beginning of a greater resistance to water privatization and commercialization in Latin America. Given the failures of privatization and neoliberal policies in Latin America, it should not come as a surprise that the people are objecting to the commodification of this basic human need.

Privatization and Commercialization

It is worth noting that privatization and commercialization are distinct processes when discussing their implementation in Latin America. Privatization connotes reorganization and management from a source other than the public sector, and can involve a spectrum of private occupation. Commercialization entails the introduction of management institutions, such as free market competition (albeit simulated, in this case) into the process. However, privatization and commercialization are frequently concurrent processes, as was the case in Cochabamba.

There are only a few arguments commonly employed to defend water privatization in Latin America. The primary justification is that the governments of one of these countries have previously failed to adequately provide water, either because of incompetence or corruption. Organizations like the World Bank, which frequently finance privatization projects, dogmatically believe that the open market is more efficient at resource management than the state because the government is “overextended.” Furthermore, they think that the competition in private sector development will lead to higher quality and lower cost services. Another common rationale is that making water into a commercial good – thus assigning monetary value to water – makes consumers less likely to waste it. According to this argument, the commercialization of water would prevent its overuse.

These assumptions, however, are problematic. The postulation that competition is an inherent element of privatization is misguided. In fact, the corporate monopoly on water in Latin America is part of the reason that prices have been high and quality has been low. It could be wiser to address the concern about wasting water through an expansive educational program that encompasses both fundamental health issues regarding drinking water and sanitation, and information about the importance as well as preferred methods of water conservation. Another possible solution is through government regulation, which could be more effective if it were done transparently and involved community participation. The state could potentially utilize subsidies, a water tax or a credit to promote the sustainable use of water. The greatest problem with the mindset behind privatization is that while it considers water a human need, it is not deemed a human right, which essentially denies the universal right to life. Regardless, the fact is that Latin American countries that have experienced privatization of their water supply have seen little improvement, and in most cases water supply and quality have declined.

Bolivia’s Water War

Bolivia is the classic example of a situation in which the water privatization and commercialization process was disastrous. Two concessions to private, corporate control in Bolivia – part of a condition of a World Bank loan of US$20 million to the Bolivian government in 1997 – have now been rejected through popular uprisings. The first was in Cochabamba in 2000 against Aguas de Tunari, a subsidiary of the enormous U.S.-based Bechtel Corporation (which was the only bidder). The second uprising occurred in La Paz/El Alto, where a subsidiary of the French company Suez, called Aguas de Illimani S.A. (AISA), was thrown out in 2005. In Cochabamba, after Bechtel was installed, it quickly raised rates by an average of 35% (and in some cases as much as 200%), which was far outside the budget of the city’s poor and would have left many without access to water. Licenses were even required for individuals to collect rainwater from their roofs, and people were charged for water taken from their own wells.

Protests escalated to the point that the Bolivian government declared a state of martial law, and eventually the company was forced to abandon their operations in the country. Supporters of privatization in Bolivia argue that these tariff increases were necessary to improve the existing infrastructure and expand the service area. Furthermore, some have suggested that antecedent economic and social factors, such as political corruption and pre-existing anti-privatization public sentiment, contributed to the tinderbox complexity of the situation in Cochabamba and were responsible for the failure of water privatization.

After Bechtel was driven out by public outrage, the international attention given to Cochabamba’s “Water War” faded, although problems still remained. Marcela Olivera, the Latin American Coordinator of Food and Water Watch’s Water for All Campaign, writes that,

“the other battle that’s still going on, that we’re fighting now in the form of the struggle over water rights, has to do with our not being able to put together an effective, participatory popular alternative with social controls to serve as a counter to privatization, to private control of resources. This is a battle that’s still being waged in Cochabamba, but it’s less romantic and not so easy to talk about, because there are a lot of problems with the water company. Things have not been resolved now that the company has been reclaimed. I think this is where the true work lies - -work that is harder, unrecognized, and still involves an entrenched battle.”

The withdrawal of Bechtel left SEMAPA, Bolivia’s municipal water service, in charge of distribution. This service was also inadequate and left the poorer southern districts without water. After Evo Morales was elected in 2005, in part due to the social protest ignited by the Cochabamba incident, he created a Ministry of Water in Bolivia with the goal of achieving equal and universal access to water. While Bolivia has approved a new constitution that considers water a fundamental right and bans private appropriation, little progress has been made towards the country’s goal, as only US$800,000 was appropriated for the water budget in 2008.

WASHINGTON -- You can't get there from here. Not if there is defined as health insurance coverage for everyone in the United States, lower costs for the millions of insured who are being crushed by its price, and relief for employers who are burdened by an expense many wish they could wipe off their books. And not if here is where the health insurance political debate is stuck.

At the moment, Republicans are gleeful and Democrats glum because of a Congressional Budget Office analysis -- based on an incomplete and early draft of what is likely to be the most liberal-leaning health care proposal to emerge from the Senate -- that shows the measure just won't get the job done. The budget office says the partial draft put together mainly by Sen. Edward M. Kennedy, D-Mass., would reduce the number of uninsured by only about 16 million (out of upwards of 47 million) and cost about $1 trillion over the next decade. That's very little bang for a lot of bucks. But no one should be surprised at either number. For starters, candidate Barack Obama never ran on a platform to provide universal coverage. Of course he always said -- then and now -- that his goal is to cover everyone. But he has never put forward a concrete proposal for doing so, and hasn't endorsed a firm mandate that everyone purchase insurance. Remember those primary-season debates in which rivals Hillary Clinton and John Edwards criticized him for this? Attention should have been paid.

Now President Obama has left the legislative "details," as the White House likes to call them, to our esteemed lawmakers on Capitol Hill. This has fed an every-member-for-himself mentality, an instinct that needs no nourishment. Lawmakers of every political leaning are putting forward their own ideas, none of them as tough-minded or comprehensive as a single administration-initiated proposal might have been. Why? Because senators and members of the House represent discrete districts that are driven by their own local and political imperatives. They don't represent the country as a whole -- nor, when the subject is as complicated and has so many regional differences as health care, should we expect them to.

The result is a raft of proposals that are patch-and-fill jobs on the current system -- a system that pretty much everyone believes is crumbling to the point of collapse. This is an odd way to begin a major reconstruction project.

No one has seriously proposed concrete cost controls such as discount purchasing of prescription drugs by a government entity, which would demonstrably cut costs. In fact, the initial CBO analysis that my fellow liberals are so upset about shows not cost savings but a great deal of cost-shifting: The government would save money it now uses to subsidize tax-free insurance premiums, because some employees would drop workplace plans and purchase insurance through a new "exchange." But this savings would only partially offset the cost of providing subsidies to those who can't afford to purchase a policy outright. Meanwhile, the private insurance industry would continue to be the chief source of coverage -- and the only one, if the industry gets its way and Democrats produce legislation that does not create a public insurance plan as one purchase option.

Advocates of a single, national insurance system that would involve explicit cost controls and guidelines for care -- that might put an end to such wasteful practices as over-testing -- have been shunted aside. This is in part because Democrats quiver when Republicans call them "socialists." But Republicans cry "socialist" even when Democrats promote weak reforms that barely nick the vested interests. That's what's happening now. No one has seriously proposed an overhaul that would achieve what a single-payer system has been shown to accomplish in most other countries: universal coverage with lower costs that delivers better results than we now get in the United States.

Instead, Democrats have all but abandoned the idea that everyone be covered without exception. They've so far avoided endorsing clear cost-containment measures that would pass the budget-scorers' test of legitimacy. The wished-for savings that Obama says he wants the private insurance industry to achieve are exactly that -- wishes. The winners so far are health-industry lobbyists. They sense that their chances of protecting the interests of big insurers, drug companies, medical specialties, technology companies and the like are improving every day. They're probably right.

June 19, 2009

In his recent Town Hall meeting as well as in his recent speech to the American Medical Association, Obama has reemphasized his call for a public option in a revised health care system. At the same time he has ruled out single payer which would represent a public option for everyone and the elimination of private health care insurance. Obama said essentially that single payer was off the table because it wouldn't work in the US due to American traditions surrounding health care.

What are not legitimate concerns are those being put forward claiming a public option is somehow a Trojan horse for a single-payer system. I'll be honest. There are countries where a single-payer system may be working. But I believe – and I've even taken some flak from members of my own party for this belief – that it is important for us to build on our traditions here in the United States. So, when you hear the naysayers claim that I'm trying to bring about government-run health care, know this – they are not telling the truth.

What I am trying to do – and what a public option will help do – is put affordable health care within reach for millions of Americans. And to help ensure that everyone can afford the cost of a health care option in our Exchange, we need to provide assistance to families who need it. That way, there will be no reason at all for anyone to remain uninsured.

It is important for us to build on our traditions here in the United States. What does this mean? Is it more important for us to build on our traditions than it is for us to institute the best health care system possible? This is typical American exceptionalism and American arrogance and a misguided appeal to "tradition." Is it more important to build on a traditional policy or to have the best policy?

Rationally, if we are redesigning some system - any system - it should be more important to come up with the best system possible at that time rather than building on tradition. There are a lot of good health care systems out there including single payer in which health care delivery is privatized but health insurance is publicized. Doctor offices and hospitals are privately run, but costs are paid by government run health insurance. There are other systems such as the new Dutch health care system where insurance is provided by private companies which are heavily regulated by the government to provide universal coverage at reasonable cost.

You would think that the US would have studied the health care systems of other countries and then chosen the best or chosen a hybrid or modified the best system at the margins. But, no, we must have an American system rather than the very best system. So, in other words, by building on tradition, by elevating tradition above logic and rationality, Obama is calling for a system that is less than the best possible system devised by the best possible minds and the best possible human efforts. AMERICANS MUST SETTLE FOR A LESS GOOD SYSTEM BECAUSE OF TRADITION.

But when Obama calls for a health care system based on American traditions instead of what is rationally the best system we could devise, he is really pandering to the private health insurance industry. "American traditions" are really code words for "we don't want to fight the private health insurance lobby because they are too powerful." Other countries are free to come up with and revise their health care systems but we Americans are beholden to the health insurance lobbyists and their corporate sponsors. Politicians who take large campaign contributions from health insurance corporations argue vociferously that private health insurance is the way to go even though the private health insurance industry makes its profits by denying needy folks health care. Every dollar in health care denied is a dollar of profit. They make their profits by dropping folks who have health problems and are likely to cost them money. At the very least the government should mandate that private insurance must enroll everyone at the same rates regardless of pre-existing conditions else the private health insurance industry will continue to cherry pick the healthiest folks to enroll and to cover while folks that really need health care go begging. And the public option will have to pick up the rest putting it at a disadvantage.

This need to cater to tradition will probably result in a health care mish mash that really sucks dooming American citizens to a health care system in which costs - both individual and systemic - continue to rise while providing poorer overall outcomes than the rest of the industrialized world. Fee for service medicine rather than fee for health outcomes dooms the American traditional system to a system in which the more fancy tests run and the more fancy procedures used, the higher are doctor profits as well as individual and systemic costs. Universal coverage is one thing but at what cost? The whole thing is very simple. You want quality health care delivery, universal coverage and reasonable individual and systemic cost. All the rest is window dressing.

You would think that the way to go about revising or reforming health care would be to have a think tank composed of the brightest minds come up with a health care system that was laid out for all the world to see before being voted into law. Or maybe several competing think tanks or task forces would come up with several competing health care systems. Then a "conciliation" process would produce one system that retained the best features of the competing potential systems. Such a rational process based upon and built upon what has come before in countries all over the world should produce a better final outcome than a health care system based on American traditions. Taiwan, when it revised its health care system looked at the best systems from all over the world rather than basing its new health care system on Taiwanese traditions.

Taiwan consulted health care experts from abroad to come up with the best possible system. Did the US do any such consultation? No. The US figures it's superior to any other country and has nothing to gain by following their example or consulting their experts. American arrogance and exceptionalism again. Here's a quote regarding the Taiwanese method:

Hongjen Chang was one of the officials in charge back then. Walking through Taipei's imposing Chiang Kai-shek Memorial Park, he recalls how they did it.

"Taiwan is a small island," he says. "We always look abroad internationally for ideas."

Chang quotes a Chinese saying: "'The track of the previous cart is the teacher of the following cart.'"

In other words, if someone else's oxcart has found a good route to universal health coverage, follow those tracks. "If they were trapped in trouble, avoid that track. Find a new track," Chang says.

The government consulted experts from around the world, like Taiwanese American health economist Tsung-mei Cheng.

"In the end, the program that they finally set up in 1995 really is like a car that was made of different parts, imported from overseas, but manufactured domestically," Cheng says.

The process undertaken by the American Congress with various committees holding hearings, in which lobbyist drone Congressmen advocate for the corporations that are paying them and for whom they hope to hold lucrative positions once they exit "public service," is a travesty to a democratic process in which the best possible health care plans would be laid before the American people and then debated. This process would insure that the final implementation would be one in which the new health care system was arrived at by a rational process, not one based on American traditions. American traditions is just code for putting private profits above the interests of the American people.

June 18, 2009

Well, Well... Going to Healthcare Hell

by Donna Smith

We've learned some remarkable things over the past few weeks about healthcare reform in these United States. Remarkable, tragic, sad, disgusting and unacceptable truths about what we've put up with for decades and what we are about to see written into law unless we rise up.

It was Jesus Christ who is credited with saying, "Ye shall know the truth and the truth shall set you free." We'll see about that really soon. Our elected officials aren't really too partial to that comment by J.C.

Here are some truths we've learned:

Those who are protecting the profit-takers in healthcare will say or do anything. You know, the old saw, "Don't let the government get between you and your healthcare," they threaten as ammunition to scare you away from progressively financed, guaranteed healthcare for all - like those scary Canadians or Scandinavians have. But do you know what the reality is in Canada and many of the nations where healthcare is actually valued as a human right? In Canada, it is a crime punishable by up to 10 years in prison for a government bureaucrat to interfere in any way in a patient care issue or decision.

While here in the United States, we let insurance companies not only get in between our doctors and patients but actually block them ever seeing one another. This week we heard testimony in a Congressional committee that the insurance companies our President and Congress want so desperately to protect have no intention of stopping the practice of policy rescissions. Rescissions happen when you get sick, file an insurance claim and then the insurance company searches your records to find reasons they would have denied you coverage before your illness and then retroactively drops your coverage. And their favorite targets? The committee found, according to the Los Angeles Times, "WellPoint's Blue Cross targeted individuals with more than 1,400 conditions, including breast cancer, lymphoma, pregnancy and high blood pressure." Ugly stuff. And talk about getting between you and your doctor...

And while we're looking to enhance these companies by awarding them the business of every American by forcing purchase of their products as mandated in law, take note that women are still targets. Last month in a Senate hearing, the insurance industry said if all of us have to buy insurance they'll stop discriminating against women in the charging of premiums and the determinations of claims payment and pre-existing conditions. Wow. They'll stop killing and injuring women if they get their way and 47 million new customers forced to pay up.

In the bill released by the Senate HELP committee last week, I noted that the Indian Health Service will be exempted from the new law proposed. Really? Guess we just have to make sure those lousy, sickly Native Americans don't actually end up in someone's healthcare insurance pool using benefits to get care for chronic diseases when we can just more easily keep them covered by the seriously underfunded Indian Health Service. Horrible stuff.

And in Senator Baucus' committee, Senate Finance, they'll be OK with it if insurance companies only charge up to five times as much for age-related rating of premiums. Wow. That's shocking, and I'll bet most older people don't even know that their Congressional members are considering allowing that to be done to them. Fives times as much to be paid by older people for health insurance - and no promises about denial of claims or policy rescission. Sweet deals are being made all over the place for everyone but you and me and our neighbors and friends.

It's healthcare, human rights hell, and it going to get worse unless and until we stand up more loudly and clearly for what most of us were taught by our parents about what is decent and what is right. This Congress cannot act on our behalf as decent Americans - apparently - without our righteous demands on behalf of one another.

Step up. Stand up. Speak up. People with cancer, women, and minorities... are you feeling lucky you aren't in one of those groups? Watch out. Tomorrow could be the day you need care and your newly empowered insurance company says, "Go to hell." And your emboldened elected officials who failed to act say, "Sorry, we couldn't pass real reform. Maybe next time."

The time is drawing closer when the Rose Garden ceremony will only feature those who built this purgatory for so many of us and aim to take it a few levels deeper.

June 13, 2009

What a perplexing and ridiculous turn of events: two countries, Russia and China, who used to be our arch enemies (remember the Cold War and Communism) are now our bankers!! They have loaned us trillions of dollars. Our government borrows money from them every day just to keep the US government afloat. The US owes China about $1 trillion and Russia, $600 billion. How does it come to pass that two arch enemies of the US just a mere 20 years ago have now become America's bankers with a major controlling interest in the US?

Now the US is being lectured to by Russian Prime Minister Putin and the Chinese about American profligacy and indigency! They are both getting antsy about the stability of the US dollar. In fact they are talking about getting rid of the US dollar as the world's reserve currency. Where will that leave the US? Finally defeated by our archenemies without a shot ever have been fired? Give the capitalists enough rope and they will hang themselves? Other countries as well are getting rid of dollars at a time when the US is running even higher budget deficits and, therefore, is even more in need of foreign borrowing. What this means is that the US will have to print more money thus risking inflation which will make foreign borrowers even more wary or that the US will have to raise interest rates to attract capital to finance its debts which will drive the US even deeper into recession and create in fact the Second Great Depression. Either prognosis leaves the US in a precarious position. China has recently lectured the US about printing more money.

We talked yesterday about Rep. Mark Kirk (R-Ill.), who claims to have met with officials in China, encouraging them not to believe the U.S. government when it comes to budget issues. It was, to my mind, one of the more striking examples in recent memory of an American lawmaker trying to undermine the United States on the international stage.

Last night, Kirk sat down for an interview with Fox News’ Greta Van Susteren. For reasons that I’ll never understand, Van Susteren not only failed to ask the Illinois Republican about his efforts to undercut the U.S. with China, but actually encouraged his efforts.

The interview, in a nutshell, was a discussion about Chinese fears. Treasury Secretary Tim Geithner has said China has full confidence in the U.S. Kirk claims a) that Chinese officials are more afraid than Geithner realizes; and b) he warned them that U.S. budget figures are not at all credible. He told Van Susteren:

“[P]rivately, the key concern [among Chinese officials] is, Should we buy any more U.S. debt? And over time, what’s happening is China is beginning to cancel Congress’s credit card, doesn’t want to lend much more money to the United States, and especially is worried about the Fed’s policy of printing money to buy new debt.”

Now, if China were to decide to stop lending us money, the consequences would be severe. Kirk knows this. It’s why it’s remarkable that he went to China to directly encourage them not to trust the United States. If Hugo Chavez were to tell the Chinese that Americans are untrustworthy, I’d understand. If Mahmoud Ahmadinejad encouraged China to question Americans’ word, that would hardly be a surprise.

But Mark Kirk is an American elected official. He told Fox News last night that China is “worried,” but he neglected to mention that he encouraged the Chinese to be more worried about the reliability of the United States government.

Greta Van Susteren added, “”[I]f our credit is so lousy, if this is getting so grim, why in the world would the Chinese want to pick up any more of our debt? I wouldn’t!”

I’m generally reluctant to ask questions like these, but I can’t help but wonder — whose side are these guys on?

So it seems like the fate of the US is in the hands of Russia and China? What a ridiculous turn of events and how ridiculous that the two biggest spenders, Reagan and Bush Jr, the two biggest warriors cold and otherwise, are responsible for about 80% of the US debt requiring immense amounts of interest to service it. And just at a time when the US blithely assumes that China, Saudi Arabia and other foreign nations are going to continue to finance US debt, these countries are selling off US dollars to bail themselves out due to the global recession:

After years of bankrolling US consumption with the purchase of dollar assets, most nations are going to be net sellers of dollars in 2009. Just Russia, Saudi Arabia, India, and Japan alone have around $2 trillion in US holdings, and, if the current trade trends continue, America can expect foreign central banks to sell at least 1 trillion dollars this year. This begs the question: who exactly is going to be buying all these assets?

If the US thinks that bailing out the large US financial institutions like Citibank and AIG is the ticket to reestablishing a sound financial economy somewhat equivalent to the status quo ante, what if the crisis du jour becomes the bailing out of the US government itself because it can't borrow enough money to finance current budget deficits? And what if printing more money is the only option and it becomes apparent to world governments that this will only lead to inflation which will reduce the value of the investments which they already hold in US Treasuries? What are the options then? Certainly a more radical approach will have to be taken to the restructuring of the US economy than has been undertaken by Obama, Geithner and Summers so far. Assuming that this turn of events occurs while Obama is still in office, the political fall-out would be immense. Obama's initial policies for economic recovery would turn out to have been big failures. If it occurs under a Republican administration the fall-out would be disastrous. There would be massive poverty and homelessness with social services eliminated and military spending increased. The US as a bankrupt superpower would become a danger to the world.

June 11, 2009

For many years - and particularly since the onset of the global recession - Canadians and people around the world have been bombarded with news about the gross domestic product. Numbers have been issued and then updated. Predictions have been made and then revised. So powerful and predominant has GDP become, that the New York Times referred to it as "a celebrity among statistics, a giant calculator strutting about adding up every bit of paid activity ..."

But what is GDP? What does it tell us about how well or poorly we are doing as a society? More important, what does it leave out? And what are the consequences of this omission?

GDP is simply the value of all goods and services produced in a country in a given year. It was first introduced in the U.S. during the Great Depression as a way of measuring how much and how quickly the U.S. economy was shrinking. Over time, GDP has emerged as a surrogate for wellbeing, something it was never designed to be. Even the "father of the GDP," Nobel laureate Simon Kuznets, recognized that "the welfare of a nation can scarcely be inferred from a measurement of national income as defined by the GDP."

GDP makes no distinction between economic activities that are good for our wellbeing and those that are harmful. Spending on tobacco, natural and human-made disasters, crime and accidents, all make GDP go up. Conversely, the value of unpaid housework, child care, volunteer work and leisure time are not included in GDP because they take place outside of the formal marketplace. Nor are subtractions made for activities that heat up our planet, pollute our air and waterways or destroy farmlands, wetlands and old-growth forests. The notion of sustainability - ensuring that precious resources are preserved for future generations - doesn't enter the equation.

Perhaps the most eloquent summation of the limitations of GDP was expressed more than 40 years ago by senator Robert Kennedy, who noted that GDP "measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country. It measures everything, in short, except that which makes life worthwhile."

Yet, GDP continues to exert great influence. Why? Because indicators are powerful. They often influence the policy agendas and decisions of governments. As Canadian-born, economic giant John Kenneth Galbraith put it, "if you don't count it, it doesn't count."

Thus, in recent years, we have seen a resurgence of interest in indicators, and the birth of a strong global movement favouring new, more comprehensive and transparent measures of societal progress. The goal is to inform and promote policy decisions that are based on solid evidence, and that will improve the quality of life for all people. The aim is not to replace GDP, but to offer a more holistic view of wellbeing.

Canada has very much been a leader in this effort. Today is the launch of the Institute of Wellbeing and the introduction of its signature project, the Canadian Index of Wellbeing (CIW). The institute is independent, non-partisan and guided by an advisory board of Canadian and international experts. The institute is affiliated with the University of Waterloo and we look forward to this exciting new research partnership that will further validate our efforts.

The index is rooted in Canadian values. It will report on our country's progress - or lack of it - both overall and in eight specific areas that really matter to our quality of life: our standard of living; our health; the quality of our environment; our education and skill levels; the way we use our time; the vitality of our communities; our participation in the democratic process; and the state of our arts, culture and recreation. Beneficial activities will be treated as assets and harmful ones as deficits.

Today the institute released its first report, summarizing research findings in the three areas of Living Standards, Healthy Populations and Community Vitality. We noted that during so-called economic good times, Canadian workers failed to reap their share of the benefits of productivity growth, with hourly wages rising at only half of the rate of GDP.

We also reported that while Canadians are living longer, they are not living better. The decline in the portion of the population that considers itself in excellent or very good health is most marked among Canadian teenagers. Whereas more than 80 per cent of 12- to 19-year-olds reported excellent or very good health in 1998, only 67 per cent did so in 2005. On a more positive note, Canadians are well-equipped to deal with current and future challenges because we live in resilient communities built around connectedness, safety and compassion for others.

Over the course of the next year, the institute will release the results of research in the five other areas of wellbeing. Our goal is to be able to convert all eight areas into a composite index, including a single number that will provide a quick snapshot of how Canadians are really doing.

The CIW will connect the dots between public policy decisions and Canadians' quality of life. It will promote a new understanding of wellbeing and a dialogue that reshapes the way we talk about wellbeing and public policy issues. It will encourage policy-makers to make evidence-based decisions that respond to the values and needs of Canadians. In that respect, it will be a true nation-building project.

June 10, 2009

Colonialism left a mixed legacy in the developing world—but one clear result was the view among people there that they had been cruelly exploited. Among many emerging leaders, Marxist theory provided an interpretation of their experience; it suggested that exploitation was in fact the underpinning of the capitalist system. The political independence that came to scores of colonies after World War II did not put an end to economic colonialism. In some regions, such as Africa, the exploitation—the extraction of natural resources and the rape of the environment, all in return for a pittance—was obvious. Elsewhere it was more subtle. In many parts of the world, global institutions such as the International Monetary Fund and the World Bank came to be seen as instruments of post-colonial control. These institutions pushed market fundamentalism (“neoliberalism,” it was often called), a notion idealized by Americans as “free and unfettered markets.” They pressed for financial-sector deregulation, privatization, and trade liberalization.

The World Bank and the I.M.F. said they were doing all this for the benefit of the developing world. They were backed up by teams of free-market economists, many from that cathedral of free-market economics, the University of Chicago. In the end, the programs of “the Chicago boys” didn’t bring the promised results. Incomes stagnated. Where there was growth, the wealth went to those at the top. Economic crises in individual countries became ever more frequent—there have been more than a hundred severe ones in the past 30 years alone.

Not surprisingly, people in developing countries became less and less convinced that Western help was motivated by altruism. They suspected that the free-market rhetoric—“the Washington consensus,” as it is known in shorthand—was just a cover for the old commercial interests. Suspicions were reinforced by the West’s own hypocrisy. Europe and America didn’t open up their own markets to the agricultural produce of the Third World, which was often all these poor countries had to offer. They forced developing countries to eliminate subsidies aimed at creating new industries, even as they provided massive subsidies to their own farmers.

Free-market ideology turned out to be an excuse for new forms of exploitation. “Privatization” meant that foreigners could buy mines and oil fields in developing countries at low prices. It meant they could reap large profits from monopolies and quasi-monopolies, such as in telecommunications. “Liberalization” meant that they could get high returns on their loans—and when loans went bad, the I.M.F. forced the socialization of the losses, meaning that the screws were put on entire populations to pay the banks back. It meant, too, that foreign firms could wipe out nascent industries, suppressing the development of entrepreneurial talent. While capital flowed freely, labor did not—except in the case of the most talented individuals, who found good jobs in a global marketplace.

June 09, 2009

The US has convinced itself that the current situation in which the US as consumer stokes the world economy while those nations which accumulate dollars in the process will continue to finance American government debt is fallacious. The argument is that the dollar is the world's reserve currency so that Chinese accumulation of dollars has nowhere to go but back into the US in terms of loans. Thus the cycle is complete. China accumulates dollars by selling us cheap products. China recycles those dollars by buying US Treasury bonds. Dollars come home to be spent yet again on Chinese products.

But wait a minute. Demand for Chinese products is made by US consumers who have the money to make purchases. If Americans don't have the money (or the credit) any more, they won't be able to buy Chinese products, and the Chinese won't be accumulating that many dollars with which to buy US Treasuries. And in fact US consumers have stopped consuming because their credit has dried up and they are losing jobs which are the basis of purchasing power.

Let's look at the other side of the equation as well. The Chinese are under no obligation to fund the US government debt by buying Treasury bonds. They are under no obligation to continue as the US' banker. In fact they could spend American dollars in a number of other ways thereby starving the US government of its need for deficit spending. For instance, they could buy up American real estate. They could also buy American businesses. They could also buy up resources in other parts of the world paying in dollars. The fact that the dollar is the world's reserve currency could come back to bite us in the ass if dollars are used NOT to invest in US government debt. Also the world could phase out the dollar as a reserve currency - something China and Russia have already been talking about because they are having doubts about the stability of the dollar in the long term. They are afraid of the inflationary effects of the huge amount of deficit spending the US is undertaking in order to buy itself out of the current recession. They are losing faith in the US dollar. How ironic if the Chinese and others start purchasing US equity instead of US debt. At that point the US will become a subsidiary of China and other foreign countries who follow suit. It won't be a fully owned subsidiary of China because other countries also own a significant amount of US debt.

The rationale that money flowing from US consumers to China and then back again in a complementary cycle benefitting both is nonsense because the cycle is broken. Money flows from US consumers to Chinese producers to be sure. Then in China a significant portion of that money flows into the coffers of the Chinese government through taxation. The Chinese government buys US debt, and the US government spends that money on its military-industrial complex and in fighting wars in order to maintain its position of world dominance thus funneling that money back to US consumers via military and defense contractor pay which completes the cycle. The US borrows about $1 billion a month from China. We spend about $30 billion a month on Chinese imports so there is a much greater outflow than inflow of dollars. Even if every dollar of US government spending found its way back into the consumer economy and was spent on Chinese products, the consumer economy would have to come up with funds from elsewhere to continue importing Chinese products at the same rate. As the US loses its manufacturing base to China, the civilian economy continues to wither. And as the economy withers, US consumers cannot continue to buy Chinese products, the Chinese government won't continue to accumulate dollars at the same rate and will no longer have as many dollars to invest in US debt nor the incentive for so doing.

But wait a minute. As the US loses its manufacturing base, it depends on foreign manufacturers more and more even for its military equipment. So instead of repatriated dollars flowing into the hands of US consumers, they flow right back out again to foreign manufacturers including China. The US overstretch of some 700 military bases in foreign countries means that money is paid out to foreigners to support those bases. So less and less money is recycled by the US government into the hands of US consumers. The unemployed of course consume less. Americans who change their spending habits and start saving more are consuming less. Americans who have lost equity in their homes and 401ks will consume less thereby driving down Chinese imports. China will respond to this by seeking to sell its exports elsewhere and also by developing its own internal markets. The result of this will be an increased unwillingness to buy additional US debt, and this will leave the US government in a pickle. It will have to increase taxes on its own population in order to finance the US government instead of relying on borrowing money from foreigners.

Lower taxes in the US is partly to blame for putting the US into its current cycle of debt and dependency on foreign borrowing. When foreigners are no longer willing to buy US debt, the US must either raise taxes or print money which it is already starting to do. Printing money inevitably leads to inflation, and the Chineser know this - hence their reluctance to buy more US debt. As US consumers buy fewer Chinese products, the Chinese will wean themselves away from their dependency on US markets. All of this bodes ill for the dollar as the world's reserve currency and for exploding US government debt. US interest rates will have to rise in order to attract new investors and to make up for inflation. This will make less money available for investment in new businesses, and US manufacturing and other businesses will continue to decline as the cost of doing business in the US rises. This will mean that US GDP will be even more dependent on US consumers at a time when job losses and declining home equity puts less money into the hands of US consumers.

A vicious cycle is developing in which US consumers lose the wherewithal to consume causing more job loss and producing less tax revenue. At the same time foreigners become less willing to bail the US out by buying up its debt. This leads to higher taxes which kills even more jobs. The US overextended military empire will of necessity have to come to an end, and social services will have to decline even as they are being cut off in California today. The US once the world's first world nation will turn into a third rate nation while China assumes its mantle as the world's economic and military superpower.

Ronald Reagan started this process of government underfunding from domestic sources and reliance on foreign borrowing. When Reagan entered office, the US national debt was around $1 trillion. Reagan quadrupled this debt to $4 trillion by the time he left office. Despite the fact that Clinton balanced the budget in his out years, George W Bush, inheriting a $5 trillion national debt, managed to double it to $10 trillion by the time he left office. Reagan and Bush started the cycle of increasing government debt by lowering taxes and increasing dependency on foreign borrowing resulting in the downward spiral the US is experiencing today. Imprudent government economic policy under Bush and Reagan primarily is responsible for the precarious situation the US finds itself in today. Add to this the disastrous policies of deregulation starting with the repeal of Glass-Steagall, which put a firewall between commercial and investment banking, and you have the unmitigated disaster of the US economy circa 2009. And the chickens have not even come home to roost yet regarding US debt as the dollar remains strong and the US continues to borrow money to jumpstart the economy. When the US is no longer in a position to borrow money at favorable rates, the reality of the shambles of the US economy will become apparent.

June 08, 2009

Debunking Canadian Health Care Myths

by Rhonda Hackett

As a Canadian living in the United States for the past 17 years, I am frequently asked by Americans and Canadians alike to declare one health care system as the better one.

Often I'll avoid answering, regardless of the questioner's nationality. To choose one or the other system usually translates into a heated discussion of each one's merits, pitfalls, and an intense recitation of commonly cited statistical comparisons of the two systems.

Because if the only way we compared the two systems was with statistics, there is a clear victor. It is becoming increasingly more difficult to dispute the fact that Canada spends less money on health care to get better outcomes.

Yet, the debate rages on. Indeed, it has reached a fever pitch since President Barack Obama took office, with Americans either dreading or hoping for the dawn of a single-payer health care system. Opponents of such a system cite Canada as the best example of what not to do, while proponents laud that very same Canadian system as the answer to all of America's health care problems. Frankly, both sides often get things wrong when trotting out Canada to further their respective arguments.

As America comes to grips with the reality that changes are desperately needed within its health care infrastructure, it might prove useful to first debunk some myths about the Canadian system.

Myth: Taxes in Canada are extremely high, mostly because of national health care.

In actuality, taxes are nearly equal on both sides of the border. Overall, Canada's taxes are slightly higher than those in the U.S. However, Canadians are afforded many benefits for their tax dollars, even beyond health care (e.g., tax credits, family allowance, cheaper higher education), so the end result is a wash. At the end of the day, the average after-tax income of Canadian workers is equal to about 82 percent of their gross pay. In the U.S., that average is 81.9 percent.

Myth: Canada's health care system is a cumbersome bureaucracy.

The U.S. has the most bureaucratic health care system in the world. More than 31 percent of every dollar spent on health care in the U.S. goes to paperwork, overhead, CEO salaries, profits, etc. The provincial single-payer system in Canada operates with just a 1 percent overhead. Think about it. It is not necessary to spend a huge amount of money to decide who gets care and who doesn't when everybody is covered.

Myth: The Canadian system is significantly more expensive than that of the U.S.

Ten percent of Canada's GDP is spent on health care for 100 percent of the population. The U.S. spends 17 percent of its GDP but 15 percent of its population has no coverage whatsoever and millions of others have inadequate coverage. In essence, the U.S. system is considerably more expensive than Canada's. Part of the reason for this is uninsured and underinsured people in the U.S. still get sick and eventually seek care. People who cannot afford care wait until advanced stages of an illness to see a doctor and then do so through emergency rooms, which cost considerably more than primary care services.

What the American taxpayer may not realize is that such care costs about $45 billion per year, and someone has to pay it. This is why insurance premiums increase every year for insured patients while co-pays and deductibles also rise rapidly.

Myth: Canada's government decides who gets health care and when they get it.

While HMOs and other private medical insurers in the U.S. do indeed make such decisions, the only people in Canada to do so are physicians. In Canada, the government has absolutely no say in who gets care or how they get it. Medical decisions are left entirely up to doctors, as they should be.

There are no requirements for pre-authorization whatsoever. If your family doctor says you need an MRI, you get one. In the U.S., if an insurance administrator says you are not getting an MRI, you don't get one no matter what your doctor thinks - unless, of course, you have the money to cover the cost.

Myth: There are long waits for care, which compromise access to care.

There are no waits for urgent or primary care in Canada. There are reasonable waits for most specialists' care, and much longer waits for elective surgery. Yes, there are those instances where a patient can wait up to a month for radiation therapy for breast cancer or prostate cancer, for example. However, the wait has nothing to do with money per se, but everything to do with the lack of radiation therapists. Despite such waits, however, it is noteworthy that Canada boasts lower incident and mortality rates than the U.S. for all cancers combined, according to the U.S. Cancer Statistics Working Group and the Canadian Cancer Society. Moreover, fewer Canadians (11.3 percent) than Americans (14.4 percent) admit unmet health care needs.

Myth: Canadians are paying out of pocket to come to the U.S. for medical care.

Most patients who come from Canada to the U.S. for health care are those whose costs are covered by the Canadian governments. If a Canadian goes outside of the country to get services that are deemed medically necessary, not experimental, and are not available at home for whatever reason (e.g., shortage or absence of high tech medical equipment; a longer wait for service than is medically prudent; or lack of physician expertise), the provincial government where you live fully funds your care. Those patients who do come to the U.S. for care and pay out of pocket are those who perceive their care to be more urgent than it likely is.

Myth: Canada is a socialized health care system in which the government runs hospitals and where doctors work for the government.

Princeton University health economist Uwe Reinhardt says single-payer systems are not "socialized medicine" but "social insurance" systems because doctors work in the private sector while their pay comes from a public source. Most physicians in Canada are self-employed. They are not employees of the government nor are they accountable to the government. Doctors are accountable to their patients only. More than 90 percent of physicians in Canada are paid on a fee-for-service basis. Claims are submitted to a single provincial health care plan for reimbursement, whereas in the U.S., claims are submitted to a multitude of insurance providers. Moreover, Canadian hospitals are controlled by private boards and/or regional health authorities rather than being part of or run by the government.

Myth: There aren't enough doctors in Canada.

From a purely statistical standpoint, there are enough physicians in Canada to meet the health care needs of its people. But most doctors practice in large urban areas, leaving rural areas with bona fide shortages. This situation is no different than that being experienced in the U.S. Simply training and employing more doctors is not likely to have any significant impact on this specific problem. Whatever issues there are with having an adequate number of doctors in any one geographical area, they have nothing to do with the single-payer system.

And these are just some of the myths about the Canadian health care system. While emulating the Canadian system will likely not fix U.S. health care, it probably isn't the big bad "socialist" bogeyman it has been made out to be.

It is not a perfect system, but it has its merits. For people like my 55-year-old Aunt Betty, who has been waiting for 14 months for knee-replacement surgery due to a long history of arthritis, it is the superior system. Her $35,000-plus surgery is finally scheduled for next month. She has been in pain, and her quality of life has been compromised. However, there is a light at the end of the tunnel. Aunt Betty - who lives on a fixed income and could never afford private health insurance, much less the cost of the surgery and requisite follow-up care - will soon sport a new, high-tech knee. Waiting 14 months for the procedure is easy when the alternative is living in pain for the rest of your life.

June 07, 2009

Obama now realizes he has to put more Presidential muscle into the health plan debate and not leave the details up to Congress because Congress is in the process of undermining Obama's key goals and vitiating the health plan to the point of unrecognizability, to the point of making it a ridiculous parody of what Obama intended.

Mindful of the failures of former President Bill Clinton, whose intricate proposal for universal care collapsed on Capitol Hill 15 years ago, Mr. Obama until now had charted a different course, setting forth broad principles and concentrating on bringing disparate factions — doctors, insurers, hospitals, pharmaceutical companies, labor unions — to the negotiating table.

But Mr. Obama has grown concerned that he is losing the debate over certain policy prescriptions he favors, like a government-run insurance plan to compete with the private sector, said one Democrat familiar with his thinking. With Congress beginning a burst of work on the measure, top advisers say, the president is determined to make certain the final bill bears his stamp.

“Ultimately, as happened with the recovery act, it will become President Obama’s plan,” the White House budget director, Peter R. Orszag, said in an interview. “I think you will see that evolution occurring over the next few weeks. We will be weighing in more definitively, and you will see him out there.”

...

But as Mr. Obama wades into the details of the legislative debate — a process that began last week when he released a letter staking out certain specific policy positions for the first time — he will face increasingly difficult choices and risks.

Aides say he will not dictate the fine print. “It was never his intent to come to Congress with stone tablets,“ said his senior adviser, David Axelrod. But he will increasingly make his preferences known.

...

Many Republicans are already angry over the emphasis Mr. Obama placed on the public plan in last week’s letter. Senator Mitch McConnell, the Republican leader, said Friday that “the key to a bipartisan bill is not to have a government plan in the bill.”

Mr. Obama is well aware of these risks, advisers say. “This is what he is now very focused on,“ Mr. Orszag said. “What are the key things that are nonnegotiable? He is asking those sorts of questions: What are the drop-dead things that we need to have in order to have some hope of addressing long-term cost growth?”

Finally, Obama realizes that his strategy of leaving it up to Congress will not get the job done. And there is no popular movement in the US to demand that Congress adopt the public option. So Obama must essentially stake his reputation and his Presidency on his single handed ability to sway the people and the Congress to come up with something that's not a mockery of itself. If Congress has its way, the "reform" health plan will essentially be written by lobbyists for Big Pharma and Big Health Insurance Corporations and will totally favor private over public interests.

He has to forget the notion of bipartisanship, bring his version of a health care bill before Congress as a reconciliation bill thus avoiding a Repoblicon filibuster and concentrate on getting Democrats in line. That's the only way he'll get anything meaningful accomplished. The Repoblicons are playing him for a fool and using "bipartisanship" to put a noose around his neck.

June 06, 2009

Congress is up to its old tricks again. They are about to water down Obama's health care initiative to the point of a meaningless charade that will only benefit the profit sucking insurance and pharmaceutical industries that the initiative purportedly was supposed to rein in. Now they are talking about a "public option" that would only go into effect several years from now if certain events caused a "trigger."

So they're pulling out all the stops -- pushing Democrats and a handful of so-called "moderate" Republicans who say they're in favor of a public option to support legislation that would include it in name only. One of their proposals is to break up the public option into small pieces under multiple regional third-party administrators that would have little or no bargaining leverage. A second is to give the public option to the states where Big Pharma and Big Insurance can easily buy off legislators and officials, as they've been doing for years. A third is bind the public plan to the same rules private insurers have already wangled, thereby making it impossible for the public plan to put competitive pressure on the insurers.

Max Baucus, Chair of Senate Finance (now exactly why does the Senate Finance Committee have so much say over health care?) hasn't shown his cards but staffers tell me he's more than happy to sign on to any one of these. But Baucus is waiting for more support from his colleagues, and none of the three proposals has emerged as the leading candidate for those who want to kill the public option without showing they're killing it. Meanwhile, Ted Kennedy and his staff are still pushing for a full public option, but with Kennedy ailing, he might not be able to round up the votes. (Kennedy's health committee released a draft of a bill today, which contains the full public option.)

The Repoblicons are up to their old tricks of coopting, vitiating, adulterating, bastardizing and undermining every piece of legislation until it serves the public in name only. Instead it serves the interests of the large corporations with powerful lobbyists. Hopefully, at last, the public will see through this ignominious charade. If this happens to health care this time, it will signal the death knell of the Obama administration. Obama's mistakes were 1) not to come up with a well-defined health care proposal himself instead leaving it to a heavily lobbyed Congress and 2) starting with the "public option" scenario instead of with single payer.

Where's the jawboning and brass knuckles when we really need them? Where's the bully pulpit? Where's the horse trading when you start with a plan that gives half the store away? Max Baucus had a bunch of doctors arrested for simply standing up and asking for single payer to be included in the discussion. They are now facing 6 month jail sentences merely for protesting.

The Repoblicons are masters at this kind of thing: giving some intitiative a good sounding name which is the opposite of what it really is. Remember the Blue Sky Initiative that allowed even more pollution into the atmosphere? No Child Left Behind could have been more aptly named Devil Take the Hindermost, Children Included.

The problem is that the American people are too dumb. They are easily deceived. They are like sheep being led to slaughter. They have no inkling what the rest of the world is doing. Even Sri Lanka has universal health care! The legislation they finally come up with will probably be another bastardization of health care, and it will serve to profit Big Insurance and Big Pharma even more than they profit today. Where's the outrage? Where's the protest?

And Rush Limbaugh will probably lambaste Obama and the Democrats for being socialists all the while smiling to himself because he knows the health care legislation will be meaningless. Meaningless legislation, empty rhetoric, vacuous solutions - this is what our government is all about because it is in the pockets of Big Insurance and Big Pharma. And the American people are too dumb to know the difference. They'll end up having the wool pulled over their eyes yet again.

June 04, 2009

Rush and Newt Are Winning

by E.J. Dionne

A media environment that tilts to the right is obscuring what President Obama stands for and closing off political options that should be part of the public discussion.

Yes, you read that correctly: If you doubt that there is a conservative inclination in the media, consider which arguments you hear regularly and which you don't. When Rush Limbaugh sneezes or Newt Gingrich tweets, their views ricochet from the Internet to cable television and into the traditional media. It is remarkable how successful they are in setting what passes for the news agenda.

The power of the Limbaugh-Gingrich axis means that Obama is regularly cast as somewhere on the far left end of a truncated political spectrum. He's the guy who nominates a "racist" to the Supreme Court, wants to weaken America's defenses against terrorism, and is proposing a massive government takeover of the private economy. Steve Forbes, writing for his magazine, went so far recently as to compare Obama's economic policies to those of Juan Peron's Argentina.

Democrats are complicit in building up Gingrich and Limbaugh as the main spokesmen for the Republican Party, since Obama polls so much better than both of them. But the media play an independent role by regularly treating far right views as mainstream positions and by largely ignoring critiques of Obama that come from elected officials on the left.

This was brought home at this week's annual conference of the Campaign for America's Future, the progressive group that supports Obama but worries about how close his economic advisers are to Wall Street, how long our troops will have to stay in Afghanistan, and how much he will be willing to compromise to secure health care reform.

In other words, they see Obama not as the parody created by the far right, but as he actually is: a politician with progressive values but moderate instincts who has hewed to the middle of the road in dealing with the economic crisis, health care, Guantanamo and the war in Afghanistan.

While the right wing's rants get wall-to-wall airtime, you almost never hear from the sort of progressive members of Congress who were on an America's Future panel on Tuesday. Reps. Jared Polis of Colorado, Donna Edwards of Maryland and Raul Grijalva of Arizona all said warm things about the president-they are Democrats, after all-but also took issue with some of his policies.

All three, for example, are passionately opposed to his military approach to Afghanistan and want a serious debate over the implications of Obama's strategy. "If we don't ask these questions now," said Edwards, "we'll ask these questions 10 years from now-I guarantee it."

Polis spoke of how Lyndon Johnson's extraordinary progressive legacy "will always be overshadowed by Vietnam" and said that progressives who were challenging the administration's foreign policy were simply trying to "protect and enhance President Obama's legacy by preventing Afghanistan and Iraq from becoming another Vietnam."

As it happens, I am closer than the progressive trio is to Obama's view on Afghanistan. But why are their voices muffled when they raise legitimate concerns while Limbaugh's rants get amplified? Isn't Afghanistan a more important issue to debate than a single comment by Judge Sonia Sotomayor about the relative wisdom of Latinas?

Polis, Edwards and Grijalva also noted that proposals for a Canadian-style single-payer health care system, which they support, have fallen off the political radar. Polis urged his activist audience to accept that reality for now and focus its energy on making sure that a government insurance option, known in policy circles as the "public plan," be part of the menu of choices offered by a reformed health care system.

But Edwards noted that if the public plan, already a compromise from single-payer, is defined as the left's position in the health care debate, the entire discussion gets skewed to the right. This makes it far more likely that any public option included in a final bill will be a pale version of the original idea.

Her point has broader application. For all the talk of a media love affair with Obama, there is a deep and largely unconscious conservative bias in the media's discussion of policy. The range of acceptable opinion runs from the moderate left to the far right and cuts off more vigorous progressive perspectives.

Democrats love to think that Limbaugh and Gingrich are weakening the conservative side. But guess what? By dragging the media to the right, Rush and Newt are winning.

June 03, 2009

What I'm saying is that our net Export deficits are a huge drag on GDP growth causing high dependence historically on Consumption to grow GDP. We all know by now what the repercussions of this dependency have been and continue to be.

If we REPLACE $800 billion (I didn't check accuracy of this figure as it got stuck on my head from some previous reading) of payments to FOREIGN suppliers of fossil fuels with $800 billion (or $1 trillion) payments to US local suppliers of alternate green fuels, the positive results are many but to cite just a few:

Firstly, the current accounts deficit goes down dramatically meaning less DEBT begging to China who's also getting impatient with this role; for China's new priorities are to concentrate LESS on exports to US and Europe and more on creating/serving demand of its own people; if successful, this means China will be much less interested to buy US Treasury bonds, putting more pressure on our need to become energy independent post haste.

Secondly, recycling $800 to $1 trillion through US companies EACH YEAR (this is not a one-time event) in addition to being a massive trade deficit reducer will also be a massive pump-priming of the US economy, generating all kinds of new businesses and job prospects by all the ancilliary innovations-services that will arise to make the conversion to energy independence and energy efficiency successful. Remember the GM argument for survival support was that for the loss of every GM job, 2-3 ancillary job losses will occur, e.g., comprising suppliers, dealers, garage repair services, financial intermediaries, etc.

Thirdly, we are less dependent on volatile energy price vacillations over which we have little control; this will bring more financial stability and calm to our economic system and planning.

Now I know I´m being ambitious to the point of absurdity in thinking we can achieve this energy independence/efficiency turnaround in 8 years ... as John Lawrence has said, absent shared values, the innovative CAN DO spirit united behind some transformational leadership,this will be impossible.

For some time, we have been living in a complex ME or MY CONSTITUENCY FIRST obstructionist political gamemanship that makes Real Progress for ALL on such solvable challenges time consuming and compromised.

BUT, this does not mean we as a people should meekly give up. Passivity is for those already in Heaven but detrimental to those trying to avoid HELL on earth.

WE Americans have to SPEAK UP, bring our democracy alive, return to our common ideals, enter a genuine social dialogue, and question conventional wisdom.

This requires being vocally engaged, for example, in going for this critical change in energy dependence as quickly as humanly and technically possible ... or suffer the consequences. Same applies for universal health care and educational reforms.

Game-Changing rapid progress and real change in Energy Independence and Efficiency and Universal Health Care success within next 8 years are probably the two dominant, priority challenges that will determine the success or failure of the Obama Presidency.

Every crisis brings chances ... the more so when the crises are multiple!

Reagan Didn’t Do It

by Robert Scheer

How could Paul Krugman, winner of the Nobel Prize in economics and author of generally excellent columns in The New York Times, get it so wrong? His column last Sunday-"Reagan Did It"-which stated that "the prime villains behind the mess we're in were Reagan and his circle of advisers," is perverse in shifting blame from the obvious villains closer at hand.

It is disingenuous to ignore the fact that the derivatives scams at the heart of the economic meltdown didn't exist in President Reagan's time. The huge expansion in collateralized mortgage and other debt, the bubble that burst, was the direct result of enabling deregulatory legislation pushed through during the Clinton years.

Ronald Reagan's signing off on legislation easing mortgage requirements back in 1982 pales in comparison to the damage wrought 15 years later by a cabal of powerful Democrats and Republicans who enabled the wave of newfangled financial gimmicks that resulted in the economic collapse.

Reagan didn't do it, but Clinton-era Treasury Secretaries Robert Rubin and Lawrence Summers, now a top economic adviser in the Obama White House, did. They, along with then-Fed Chairman Alan Greenspan and Republican congressional leaders James Leach and Phil Gramm, blocked any effective regulation of the over-the-counter derivatives that turned into the toxic assets now being paid for with tax dollars.

Reagan signed legislation making it easier for people to obtain mortgages with lower down payments, but as long as the banks that made those loans expected to have to carry them for 30 years they did the due diligence needed to qualify creditworthy applicants. The problem occurred only when that mortgage debt could be aggregated and sold as securities to others in an unregulated market.

The growth in that unregulated OTC market alarmed Brooksley Born, the Clinton-appointed head of the Commodity Futures Trading Commission, and she dared propose that her agency regulate that market. The destruction of the government career of the heroic and prescient Born was accomplished when the wrath of the old boys club descended upon her. All five of the above mentioned men sprang into action, condemning Born's proposals as threatening the "legal certainty" of the OTC market and the world's financial stability.

They won the day with the passage of the Commodity Futures Modernization Act, which put the OTC derivatives beyond the reach of any government agency or existing law. It was a license to steal, and that is just what occurred. Between 1998 and 2008, the notational value of the OTC derivatives market grew from $72 trillion to a whopping $684 trillion. That is the iceberg that our ship of state has encountered, and it began to form on Bill Clinton's watch, not Reagan's.

How can Krugman ignore the wreckage wrought during the Clinton years by the gang of five? Rubin, who convinced President Clinton to end the New Deal restrictions on the merger of financial entities, went on to help run the too-big-to-fail Citigroup into the ground. Gramm became a top officer at the nefarious UBS bank. Greenspan's epitaph should be his statement to Congress in July 1998 that "regulation of derivatives transactions that are privately negotiated by professionals is unnecessary." That same week Summers assured banking lobbyists that the Clinton administration was committed to preventing government regulation of swaps and other derivatives trading.

Then-Rep. Leach, as chairman of the powerful House Banking Committee, codified that concern in legislation to prevent the Commodity Futures Trading Commission or anyone else from regulating the OTC derivatives, and American Banker magazine reported that the legislation "sponsored by Chairman Jim Leach is most popular with the financial services industry because it would provide so-called legal certainty for swaps transactions. ... "

Legal certainty for swaps-meaning the insurance policies of the sort that AIG sold for collateralized debt obligations without looking too carefully into what was being insured and, more important, without putting aside reserves to back up the policies in the case of defaults-is what caused the once respectable company to eventually be taken over by the U.S. government at a cost of $185 billion to taxpayers.

Leach, an author of the Gramm-Leach-Bliley Act, which allowed banks like Citigroup to become too big to fail, is now a member of the board of directors of ProPublica, which bills itself as "a non-profit newsroom producing journalism in the public interest." Leach serves as the chair of a prize jury that ProPublica has created to honor "outstanding investigative work by governmental groups," and perhaps he will grant one retrospectively to Brooksley Born and the federal commission she ran so brilliantly before Leach and his buddies destroyed her.

June 02, 2009

Economic Recovery is Wishful Thinking

The media has been touting whatever good economic news it can find. But the truth is economic recovery is nowhere in sight

by Dean Baker

Last week we got a whole series of bad reports on the state of the economy. New and existing home sales both remain near their lowest level for the downturn, as house prices continue to drop at the rate of 2% a month. New orders for capital goods, a key measure of investment demand, fell by 2% in April. Excluding the volatile transportation sector, new orders were still down by 1.5%.

These reports might have led to gloomy news stories, but not in the US media. The folks who could not see an $8tn housing bubble are still determined to find the silver lining in even the worst economic news.

The media have obviously abandoned economic reporting and instead have adopted the role of cheerleader, touting whatever good news it can find and inventing good news when none can be found. This leaves the responsibility of reporting on the economy to others.

Any serious examination of the data shows that recovery is nowhere in sight. The basic story of the downturn is painfully simple. We have seen a collapse of a housing bubble which has devastated the construction sector and also caused consumption to plunge.

The construction sector is suffering from the enormous overbuilding during the bubble years. Measured in months of sales, the inventories of both new and existing homes are close to double their normal levels. This inventory will ensure that construction remains badly depressed at least through 2010, if not much longer.

The plunge in house prices has sent consumption plummeting. The problem is not consumer attitudes, as many commentators seem to believe. Rather, the reason that most homeowners aren't buying a lot right now is the same reason that homeless people don't buy a lot of things: they don't have the money.

The decline in house prices since the peak in 2006 has cost homeowners close to $6tn in lost housing equity. In 2009 alone, falling house prices have destroyed almost $2tn in equity. People were spending at an incredible rate in 2004-2007 based on the wealth they had in their homes. This wealth has now vanished.

Housing is weak and falling. Consumption is weak and falling. New orders for capital goods in April, the main measure for investment demand, is down 35.6% from its level a year ago. And, state and local governments across the country, led by California, are laying off workers and cutting back services.

If there is evidence of a recovery in this story, it is very hard to find. The more obvious story is one of a downward spiral, as more layoffs and further cuts in hours continue to reduce workers' purchasing power. Furthermore, the weakness in the labour market is putting downward pressure on wages, reducing workers' purchasing power through a second channel.

Happy talk will not turn this economy around. The economy needs more demand, which can only be provided by another larger dose of stimulus from the federal government. There are easy, quick and effective ways to boost the economy with additional stimulus.

First, let's give more money to state and local governments so that they don't have to lay off workers, cut back services and raise taxes. This should be a complete no-brainer since this spending will immediately boost the economy.

The government could also provide a large boost to the economy by jump-starting healthcare reform with an employer tax credit (e.g. $2,500 per worker) for firms who do not currently provide coverage. This could quickly get us to near universal coverage as Congress works to restructure the system to contain costs.

It could also provide a $2,500 tax credit to employers for giving workers paid time off. This should both increase demand in the economy and provide workers with more leisure and flexibility at the workplace.

There are other ways in which the government could quickly generate new demand, but these will not be seriously discussed until there is more general recognition that additional stimulus is needed. At some point it will be impossible to conceal the bad news and Congress' attention will return to stimulus. But the media's reality defying happy talk on the economy is delaying this moment.

Reagan Did It

By PAUL KRUGMAN

Published: May 31, 2009

“This bill is the most important legislation for financial institutions in the last 50 years. It provides a long-term solution for troubled thrift institutions. ... All in all, I think we hit the jackpot.” So declared Ronald Reagan in 1982, as he signed the Garn-St. Germain Depository Institutions Act.

He was, as it happened, wrong about solving the problems of the thrifts. On the contrary, the bill turned the modest-sized troubles of savings-and-loan institutions into an utter catastrophe. But he was right about the legislation’s significance. And as for that jackpot — well, it finally came more than 25 years later, in the form of the worst economic crisis since the Great Depression.

For the more one looks into the origins of the current disaster, the clearer it becomes that the key wrong turn — the turn that made crisis inevitable — took place in the early 1980s, during the Reagan years.

Attacks on Reaganomics usually focus on rising inequality and fiscal irresponsibility. Indeed, Reagan ushered in an era in which a small minority grew vastly rich, while working families saw only meager gains. He also broke with longstanding rules of fiscal prudence.

On the latter point: traditionally, the U.S. government ran significant budget deficits only in times of war or economic emergency. Federal debt as a percentage of G.D.P. fell steadily from the end of World War II until 1980. But indebtedness began rising under Reagan; it fell again in the Clinton years, but resumed its rise under the Bush administration, leaving us ill prepared for the emergency now upon us.

The increase in public debt was, however, dwarfed by the rise in private debt, made possible by financial deregulation. The change in America’s financial rules was Reagan’s biggest legacy. And it’s the gift that keeps on taking.

The immediate effect of Garn-St. Germain, as I said, was to turn the thrifts from a problem into a catastrophe. The S.& L. crisis has been written out of the Reagan hagiography, but the fact is that deregulation in effect gave the industry — whose deposits were federally insured — a license to gamble with taxpayers’ money, at best, or simply to loot it, at worst. By the time the government closed the books on the affair, taxpayers had lost $130 billion, back when that was a lot of money.

But there was also a longer-term effect. Reagan-era legislative changes essentially ended New Deal restrictions on mortgage lending — restrictions that, in particular, limited the ability of families to buy homes without putting a significant amount of money down.

These restrictions were put in place in the 1930s by political leaders who had just experienced a terrible financial crisis, and were trying to prevent another. But by 1980 the memory of the Depression had faded. Government, declared Reagan, is the problem, not the solution; the magic of the marketplace must be set free. And so the precautionary rules were scrapped.

Together with looser lending standards for other kinds of consumer credit, this led to a radical change in American behavior.

We weren’t always a nation of big debts and low savings: in the 1970s Americans saved almost 10 percent of their income, slightly more than in the 1960s. It was only after the Reagan deregulation that thrift gradually disappeared from the American way of life, culminating in the near-zero savings rate that prevailed on the eve of the great crisis. Household debt was only 60 percent of income when Reagan took office, about the same as it was during the Kennedy administration. By 2007 it was up to 119 percent.

All this, we were assured, was a good thing: sure, Americans were piling up debt, and they weren’t putting aside any of their income, but their finances looked fine once you took into account the rising values of their houses and their stock portfolios. Oops.

Now, the proximate causes of today’s economic crisis lie in events that took place long after Reagan left office — in the global savings glut created by surpluses in China and elsewhere, and in the giant housing bubble that savings glut helped inflate.

But it was the explosion of debt over the previous quarter-century that made the U.S. economy so vulnerable. Overstretched borrowers were bound to start defaulting in large numbers once the housing bubble burst and unemployment began to rise.

These defaults in turn wreaked havoc with a financial system that — also mainly thanks to Reagan-era deregulation — took on too much risk with too little capital.

There’s plenty of blame to go around these days. But the prime villains behind the mess we’re in were Reagan and his circle of advisers — men who forgot the lessons of America’s last great financial crisis, and condemned the rest of us to repeat it.